Entrepreneur.com posted a great article earlier this week explaining that although financing a business on credit may be risky, it can also be very rewarding. The author interviewed me a few months ago and I am even quoted in the beginning of the article. Check out the except with my quote below, or read the full article on Entrepreneur.com.
Many entrepreneurs are prepared to swap sweat equity and personal savings for a successful start. But what if all that is not quite enough
Shannon Cumberland ran out of options but still needed money to pour into her handmade botanical candles. "We all know it's very hard for a new business to get a loan," says Cumberland, who started Rosy Rings in her kitchen with financing that came from maxing out five personal credit cards. It was a risk that paid off. The company now manufactures approximately 250,000 candles per year with anticipated revenue of more than $2 million for 2009.
Roni Deutch, better known as the "Tax Lady," took a similar gamble when she started her practice in the garage of her one-bedroom condo and maxed out all her credit cards for advertising on local television. "Spending money on marketing your business is not optional. The exponential growth my law firm experienced from using my credit cards to pay for advertising made it all well worth it," she says.
With 75,000 inquiries for service per year, Deutch's card-hopping bootstrapping days are long over, while Rosy Rings' success still depends--to some extent--on plastic. "We're a seasonal business, and given the current lending environment we're still utilizing credit cards to build inventory," Cumberland says.