Are personal credit cards used to start up a business considered capital or liability?
kristopher asked:
I contributed $90,000 to start a business by using personal lines of credit. My partner contributed $10500 of cash. He is telling me that since the lines of credit have interest applied to them that they are actually company liabilities and are not to be considered capital? How does this work?
I contributed $90,000 to start a business by using personal lines of credit. My partner contributed $10500 of cash. He is telling me that since the lines of credit have interest applied to them that they are actually company liabilities and are not to be considered capital? How does this work?
Any money that is borrowed and that needs to be repaid is a liability. If the funds were borrowed personally and the company doesn’t need to repay the money then it could be capital investment made by you.