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Here’s one of most common questions we get from business owners: “I have been working in my industry for a long time. I have this great idea and I am ready to strike out on my own. I need $50,000 to start up my business. Where can I get a small business loan?” Before the business is established, it’s unlikely for you to get a $50,000 loan from a bank or even from non-bank lenders like LendingClub or FundingCircle. However, if you have good personal credit, we have a fairly painless way to get a $50k small business loan: credit cards.

I know if you are Mark Cuban, you will scoff at the idea of getting a loan for your startup. I do agree business owners should save up before they start up. But I also believe it’s a great idea to have the credit options available to smooth out the bumps in the road of a business venture.

So how does it work? Basically, you will get a couple credit cards that have at least one of the following features:

1. low interest rates, preferably 0% introduction offer for a long time.
2. no cash advance fees.
3. no balance transfer fees.
4. same interest rates for cash advance and purchases.

You will then put most of your purchases on the 0% APR credit cards. If it’s something like payroll, you can take the cash out of the no cash advance fee cards and then transfer the balance to the card with 0% interest rate.

Let’s take a look at how you can get a fallback funding option using this method.

Where to get 0% interest rate business credit cards

0% APR business credit cards are relatively easy to find, but some have steep credit requirements, so you need to know your credit score and the credit requirements for the card provider. (A free Nav account can show you how closely your business data matches a credit card provider’s requirements.) Here are four options with long introductory periods:

The Blue Business Plus Credit Card from American Express. This card features great rewards, and new applicants receive 0% on purchases for 12 months from date of account opening. There’s also no annual fee for this card.

The GM BuyPower Business Card from Capital One. This card has good rewards for those spend at gas stations, restaurants, and office supply stores. They also have an introductory offer of 0% Intro APR on purchases for the first 12 months.

Capital One Spark Cash Select for Business. This card has a promotional financing offer of N/A. In addition, it has great cash back rewards and no annual fee.

The SimplyCash® Plus Business Credit Card from American Express. This card currently offers 0% on purchases for 12 months from date of account opening. Additionally, it features rich rewards and the Expanded Buying Power feature allows you to spend beyond your credit limit.

Where to get credit cards with no cash advance fees

I have been looking for no cash advance fee cards for a while. But ultimately, I found that the best place to go is to get a credit card from your local credit union. Credit Unions are membership organizations that offer good credit products for their members. It’s not hard to find a local credit union who would offer credit cards with 0% cash advance fees and offers the same interest rates for both cash advance and credit card purchases. Their interest rates on credit cards are usually lower than big banks too (less than 10% vs. 15+%).

One example is StarOne Credit Union, which is the credit union I belong to. Their Signature Visa Rewards cards charge a 8.75% interest rate for both cash advances and purchases and $0 fees on everything: no annual fee, no balance transfer and no cash advance fees with $5000 minimal credit limit.

Keep in mind that if you get a personal credit card from your local credit union (or anywhere else), that card is meant for personal use. Use it for business purchases sparingly, and once your business is in a position not to use it anymore, try to stick to business credit cards and business loans (read here about why it’s important to separate personal and business finances).

Using the two cards together to get a 0% credit line

With a local credit union credit card and a business credit card with a promotional APR, you can use the business credit card for all the purchases that can be put on credit cards. You can get cash from the local credit union credit cards and then transfer the balance to the business credit card. You can do this repeatedly for the first X months (depending on the introductory financing offer) without incurring any financing cost. You can then switch to another 0% introductory offer card and continue this 0% borrowing.

Once you are two years in business, have hundreds of thousands of revenue and profitable, you will have a lot more business financing options. The goal of this article is to help you get there as a startup.

Borrowing responsibly

Having a $50,000 startup loan available for your new business is nice. But at the end of the day, it’s DEBT that has to be paid back. Most startup businesses fail. Use the credit line responsibly and spend it on the right things that will take your business to the next level.

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