View Full Version : Had to use personal credit card for start up expenses...now what?

10-07-2015, 06:12 PM

I recently launched a Recording Studio in Connecticut. While going through the process of getting together equipment I needed, I had to use my personal credit card to cover some immediate business expenses. My plan now is to sign up for a business credit card so that I can keep the business expenses separate going forward, but I need to figure out how to pay the debt on the personal credit card now that I am up and running in a way that doesn't screw up my taxes. I also work a full time job, which is the majority of my income (at least for the next few years).

I am an LLC. I've kept track right to the penny of every single purchase I made for the business on my personal credit card. Business is a single member LLC using my SSN. I'm also the sole credit card holder. I would like to do one of the following things, but I'm not sure which is best.

Option 1) Since I plan on getting a business credit card, I was hoping to do a balance transfer of the exact amount I spent on business expenses. I could then take advantage of 0% promos and so on, as well as making my payments cut and dry (business bank account to business credit card). My concern here is whether or not this effects my tax situation at all. I have every receipt and statement showing balances. My concern here is paper trail I think...

Option 2) Write payment checks from my business account to my existing credit card not exceeding the balance I used for business purposes. Can I do that or will it look strange making a payment to a personal credit card from a business account.

Option 3) Write myself checks from the business account (so that I'm taking a pay check) and deposit into my personal account. Then use my personal account to make a payment to the personal credit card. This is a lot more steps then I want to take, but if I have to do it this way, I will.

Essentially, I would like to know which of these methods is OK for me to use. If I've documented all the expenses, does it really matter which one I use? Any advice I can get would be greatly appreciated. Thanks!


10-20-2015, 01:17 AM
hi. i have started a cleaning business as a ltd company. i do not have enough business coming in to commit solely to it so i am also working as a sub contractor on construction sites. i have a UTR number for my day job and a UTR number for my business. i have been paying for the setting up and maintainence of the business (website, insurances etc) mainly out of my weekly wage (my personal acc). its now time to start getting my books up together for end of my first year. i dont quite know where to start or what i can put down as expences and i cant afford a bookkeeper. be grateful for any suggestions .

03-11-2016, 12:45 AM
Do not use BUSINESS credit cards if at all possible. There is no consumer protection with these. PERSONAL credit cards have the consumer protection.

If you can't get a loan from the bank, then you can look at the Alternative Finance Market. This has everything from bank-like loans and terms (with decent credit and an established business with decent incoming revenue). This also includes business cash advances. For established businesses, the cost is about 2.5% per month for money. For the worst-case businesses, you are talking about as much as 15%/mo cost of money.

Before borrowing, try to make sure that you calculate a return on the funds you would receive. Then, only borrow if the return is at least twice as much as the cost of money.

A secret with advances is that you can cut the cost substantially if you can get one that allows you to renew quickly. Renewals are usually available when the advance is paid down 50% to 75%. The sooner you renew, the lower the cost of the loan will be.

07-01-2016, 02:10 PM
Credit cards can rack up more expense in the form of interest and hidden fees. A small business loan is a better option. You can take a sufficient amount to pay off debt and expand the business at the same time now that you are up and running.

09-05-2019, 06:11 PM
The world has progressed and now it is a digital era now, where you can manage your expenses on your mobile phone. Yes, I am talking about digital wallets and they are of great use. They possess qr code payment in Singapore (https://walletfactory.com/en-sg/how-to-pay/qr-code-technology) and worldwide. Such wallets are easy to manage.

09-06-2019, 04:12 AM
To repay the personal credit card I would do this in your accounting statements. Set aside a liability account of initial owner contribution payable paired to the assets that you used the card for initially. Prioritize the liability with revenues much as you would a rent payment.

12-23-2020, 06:32 AM
Their family is one of the most prominent families in the area. They are one of the foundations that have built the whole place. - Steven C Wyer (https://www.discogs.com/artist/3078023-Steve-Wyer)