There’s been a flood of headlines lately about President Trump’s proposed 50-year mortgage, and it has people talking — and worrying. Even with a traditional 30-year mortgage, the majority of each early payment goes toward interest. In fact, a substantial portion of the total interest paid over the life of the loan happens in the first decade.
Stretch that timeline to 50 years, and homeowners end up paying even more interest up front and building equity much slower.
But the real issue underneath all of this?
A lack of financial literacy.
Most young adults leave school without understanding credit cards, amortization, mortgage interest, or basic borrowing principles. Many also take on student loans without realizing how interest accumulates or how long repayment really takes. By the time they understand it, they’re already in deep debt.
For entrepreneurs, financial literacy isn’t just important — it’s essential to building a healthy, sustainable business. That includes understanding how to use credit intentionally and responsibly.
Below are two practical ways to leverage credit in a way that supports long-term business growth.
1. Build business credit on purpose.
Your business needs its own credit identity. Two core tools help establish it:
• Business credit card or charge card
A business credit card can help build payment history, but many business owners end up carrying balances they didn’t plan for. That’s why a business charge card is often a better fit.
According to American Express:
“A business charge card … does not charge interest if you pay your balance in full each billing period.”
“Charge cards require cardholders to pay off their balance in full each month, and do not come with a pre-set spending limit.”
Because you must pay the balance in full each month, a charge card keeps spending aligned with actual cash flow. This prevents interest charges, encourages responsible spending, and still supports the development of strong business credit.
• Business line of credit (BLOC)
A business line of credit is more than a safety net — it’s a strategic tool that provides flexibility and financial strength.
A BLOC allows you to:
- Smooth out cash flow when receivables lag
- Move quickly on opportunities such as discounted inventory or equipment
- Avoid high-interest financing alternatives
- Strengthen your business’s credit profile
- Deduct interest when used for legitimate business expenses
Because interest is only charged on the amount you draw, a BLOC remains one of the most flexible and cost-effective credit tools available.
Together, these tools help establish long-term financial credibility and stability for your business.
2. Consider SBA loans as a growth lever.
When available, SBA-backed loans offer some of the most favorable financing terms for small businesses because the SBA guarantees a portion of the loan. This often results in:
- Competitive interest rates
- Lower down payments
- More flexible collateral requirements
- Higher approval likelihood for growing or newer businesses
- Longer repayment timelines that support healthier cash flow
SBA loans are particularly useful for strategic expansion, equipment purchases, real estate, and other long-term investments.
Explore More SBA Resources
If you want to dive deeper, the SBA’s Business Guide offers high-value, actionable insights for every stage of entrepreneurship.
You can explore sections such as Launch your business, Grow your business, and Manage your business, each filled with practical tools and guidance for owners:
https://www.sba.gov/business-guide
