Accepting Credit Cards

Will you offer credit to your customers? If you give credit to your customers, you are, in effect, making a loan to them. You must then ask yourself:

• Can you afford to do this?
• Do you have to extend credit?
• Can you evaluate credit risk?
• Can you collect?
• Can you afford to write off bad debts?

Customer credit can represent an unexpected cash drain on the business.

If you must offer credit, make sure that you plan how to absorb its effects -offering credit to your customers costs you money - especially if you then have to borrow funds to cover these accounts. It may strangle your business by tying up funds you could possibly use for other purposes. (Adapted from SBDC sources.)