I Never used credit to build my business.. Never will.. Credit puts you at risk.. Risk of loosing items you buy on credit /owe for ,and can't pay..
You'll build no more assets with credit than cash.. If you pay finance charges.. you loose assets !
Back during the housing / business collapse, They tell me that everyone that was foreclosed on owed $$ to a bank or mortgage..I know of no one that had their business or home paid for that foreclosed on..
Most times you can get a better deal with cash.. Credit will always cost you more by paying finance charges
Using other people's money is the method that most of the successful business people that I know use.
Example: Two men (equal in every way for the purposes of this discussion) work at a job and make $25,000 per year. They can each save $8,000 per year if they try. But, they want to start a... oh let's call it a "moving truck" business. The moving truck they want to buy costs $40,000.
Guy 1 wanted to start making money now, so he finances the truck at 5% for 5 years, and will pay $755/mo with a total finance charge will be $5300. Broken down each year, let's say he spends $9000/year to own that vehicle. Expected Revenues will be $5,000/mo. So for the year, he'll make $60,000. Let's pretend that there are no other expenses of any kind, so his profit is $60,000. Let's say he pays 25% of that in income tax, so he pays back $15,000 to the Govt. However, he gets to write off the full purchase of the truck, so his income instead is actually $51,000, so he actually pays back $12,750 in taxes. In this pretend scenario, his actual yearly income after taxes is $38,250. Let's pretend that this scenario remains the same for these 5 years... over this 5 year period, he'll profit $191,250. He'll also own a truck that is worth say $15,000. So he's profited $191,250, and gained an asset worth $15,000.
Guy 2 decides he'll wait until he can save up enough money to buy that truck. If he can save $8,000/year, it will take him 5 years to save up. So, he's already 5 years behind Guy 1. Guy 2 starts working, making $60k per year. Let's say he depreciates the truck over five years also, and the $40k cost which equals $8k per year. So his taxable income is $52000, and he pays $13,000 in taxes. He didn't spend $755/mo on the truck (although he still paid $40k for it up front) so his actual yearly profit is $47000. So, effectively, Guy 2 will "profit" about $9k more per year than Guy 1.
But at this point, year 10, Guy 1 is way waaaay ahead of Guy 2. He has made another $190k, and is over $180k ahead of Guy 2.
That's business.
It pays to build your wealth with other people's money.
