One of the most frustrating things for an entrepreneur is coming up with a great business idea, but being unable to get the concept off the ground due to a lack of financing.

With banks often unwilling to loan money to startups that have yet to make at least two years of income, unless you personally know someone who’s willing to loan you money, it can feel like you have few options to fund your fledgling operation. 

You may consider alternative financing methods like peer-to-peer lending, crowdsourcing, and venture capital financing, but those methods all involve relying on other people and can often be hard to secure unless you’re in a high-growth sector. But there’s one financing option you might not be aware of—credit card stacking.

Credit-card stacking involves using multiple business credit cards offering extended zero-percent interest rates as a source of investment capital. Under the right circumstances, such financing can be a highly effective—yet often underutilized—source of small-business capitalization.

Since even applying for several credit cards at once can hurt your personal credit score, you might think that using credit cards to finance your startup would be a terrible idea.
But keep in mind, these are business credit cards, not personal credit cards.

Business credit cards do not report on your personal credit reports, so obtaining multiple business cards won’t affect your personal credit score. And as long as you keep up with your minimum payments, you can use all of your available credit without getting penalized for having used too much of your debt-to-available credit ratio.

When done properly and under the right circumstances, card stacking can be like obtaining an interest-free line of credit with no collateral. In fact, many business owners can obtain between $30,000 and $150,000 worth of business credit—typically within just 30 days. By using this method for a year or more, it’s not unheard of for individuals to access up to $250,000 in unsecured capital.

While you can apply for zero-percent interest business cards on your own, your best bet for the most opportunities and highest credit limits is to find a commercial provider that specializes in such financing. You’ll have to do a little research, as some providers don’t advertise their service using the terms “credit card stacking” and may call it “unsecured business credit lines,” instead, but it’s nearly always the same concept.
 
The leading providers will be able to quickly identify the business cards you have the best chances of qualifying for, and they’ll know ways to strategically apply for multiple cards simultaneously, without impacting your personal credit. What’s more, these companies develop close relationships with many of the leading banks, so they’ll usually be able to get you much higher credit limits than you’d likely get on your own.

Indeed, if you try to go it alone, many times you’ll have your business credit applications systematically denied, without anyone even reviewing them. But the top commercial providers are often able to directly negotiate with the bank’s underwriters to help convince them your business idea is worth funding. 

While credit card stacking most definitely works, it’s not for everyone. Unless you have an excellent personal credit score (720 or higher), you may find it hard to get approved. The stronger your credit, the higher the credit limits you’ll have access to and the longer you’ll qualify for zero-percent interest rates. 

Though this method might sound too good to be true, it’s not just hype. In fact, the founder of the New Law Business Model used credit-card stacking to fund her business, and the company recently made the Inc. 5000 list of fastest-growing U.S companies for the second year in a row.

If you have a winning business concept, but can’t find the funding, you may want to consider credit card stacking. We can help you determine if this is the next best step to fund the growth of your business. 

We offer a complete spectrum of legal services for business owners and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer you a LIFT Your Life And Business Planning Session, which includes a review of all the legal, insurance, financial, and tax systems you need for your business. Schedule online today.