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Small Business Credit Card
26 Mar 2019

Here’s What to Know About Getting a Small Business Credit Card

Every year, business owners like you use credit cards to support their businesses. All in all, it adds up to a spend of about $430 billion and provides a wonderful alternative to applying for online loans or other sources of funding for your business.

A small business credit card might be just the thing your business needs to improve cash flows. You can also use it to help grow your business.

Many small business owners feel a bit lost about how to get the best credit card for their business. Others feel overwhelmed by the sheer amount of choice.

That’s why we created this primer. In it, you’ll learn about the advantages of a company card, as well as some of the best options out there for you. Finally, we’ll go over how to apply for your business credit card.

The Advantages of Small Business Credit Cards

You knew that corporate credit card options existed, but you may not have known how to get one. Before you apply, you might find yourself asking about the advantages of using a credit card.

Since cash flow issues cause 82 percent of business failures, business credit cards can be a lifeline. If you’re starting out, for example, you may not qualify for a business loan. Business credit cards for startups might give you access to the capital you need.

Credit cards are also used to provide working capital. Loans are often known as installment credit, which means you receive a lump sum and then pay it back over time. This is great for giving your business a one-time injection of capital.

A payday loan online may not be the right option if you need a fluctuating amount of cash on an ongoing basis. Revolving credit, which can be used over and over again, is a better option. Credit cards are one type of revolving credit.

Having a company credit card might also help you keep your business expenses in order. Many business owners use their personal credit cards. This can make business spending harder to track.

Finally, many small business credit cards offer points, miles, and other rewards. These often add up faster on a business card.

A Card for Every Business

As we noted, there are many different business credit card options out there. It can be daunting to try and pick one.

What should you look for when you consider a credit card for your business? You’ll want to keep some of the following features in mind:

  • Annual fees. Business cards usually have much higher annual fees than their personal counterparts.
  • Interest rates. Like personal cards, interest rates vary between provider and cards.
  • What perks does a card offer to your business?

You’ll want to weigh some of these factors against each other. For example, a card may have a high annual fee, but it also may have a much better incentive program. If you use the card a lot, you might end up saving more.

Finding What Your Business Needs

Different cards will offer different things to your business. It’s up to you to decide which one best fits your needs. Some cards offer travel rewards, while others will give you cash back.

If you travel for business a lot, the travel rewards card may be worth more to your business. If you don’t travel at all, though, a cash back option may be much more useful.

There are also different cards for different purposes. For example, you might be able to find starter business credit cards. These options are intended for new businesses.

If you’ve been in business for a while, you may find you qualify for a different tier of card. Finally, your options might depend on the size of your organization.

Applying for a Credit Card for Your Small Business

You’ve done some research, and you’ve decided on a few credit cards that suit your business needs. How do you go about applying for them?

Each institution will have a different application. Be sure to read the application carefully. The information you need to supply will vary.

In general, though, you can assume you’ll need to provide the following:

  • Information about the business’s revenue and financial standing
  • Information about your personal finances, including your credit score

If you’re a sole proprietor, you’ll need to provide your personal information just as if you were applying for a personal loan online. If your business is incorporated, the business information may be all that’s needed.

Sole proprietors who operate their small business part-time should list their total income. If you have a full-time job, but act as a consultant in your spare time, you’d list the business income plus your salary.

If you don’t have revenue, it’s still possible to get a credit card for your small business. Your personal financial information will have more weight.

Some providers also favor business owners who already do business with them. You may have an easier time getting a card if you have a bank account with the institution providing the card.

A Word about Credit Scores

Many business owners don’t realize their business has a credit score. If you have a loan or another financial product in the business’s name, you might have a business credit score.

This can affect your ability to get a credit card. Your personal credit score might also count when you apply for a credit card.

Using Credit Cards with Other Funding

A business credit card isn’t the only funding option you have for your business. You can use a mix of installment loans, grants, and credit cards to get access to the funding you need to grow your business.

You can also apply for and have more than one card. If you considered two or three types of cards, you might decide to use a combination of different cards.

The best credit card combination will depend on your business and its needs.

Find the Right Card for Your Business

A small business credit card might be the answer to your funding needs. It provides plenty of advantages for you. It may even make more sense than a business loan.

Are you wondering what the best credit cards are for rewards? You’re in the right place. You’ll find the answers here. Here are some other articles you might find helpful:

Your guide to personal loans no credit check
Does your startup need a loan? Here’s how to find no credit check business loans
The best small business credit cards in 2018
The proper way to apply for business loans for bad credit