Credit Cards

How To Get A Business Credit Card For New Business

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 5 minute read

It’s essential to keep your personal finances and corporate money separate. It’s crucial to preserve the legal safeguards that various business arrangements give in addition to making it simpler to handle business spending.

Getting a small-business credit card and using it solely for business-related expenditures is one simple approach to keep your business spending distinct from your personal spending.

Here’s what you need to know if you’re establishing a new business or haven’t gotten around to applying for a business credit card yet.

Where to Apply for a Business Credit Card

Take the following five steps to apply for a business credit card.

1. Make Certain That Your Company Is Eligible

Check that your company qualifies for one before taking the first step toward obtaining one. The good news is that practically every kind of business can apply for a business credit card. 

You can locate credit card issuers who are prepared to cooperate with you whether you run a formal firm like an LLC or a corporation or are just doing business as an unincorporated sole proprietorship.

The eligibility of your company may be confirmed with specific card issuers. Some people might require you to have a certain number of years in business or a certain quantity of income. 

The card’s terms and conditions paper is often where you can obtain this information. Don’t hesitate to speak with the customer, though.

2. View Your Credit Report

Your ability to obtain a business loan or business credit card will probably be impacted by your personal credit history. When evaluating your application, many card issuers analyze both your personal credit history and your business credit score. 

Before granting the card, many need a personal assurance that they’ll be accountable for the bills.

If your firm is relatively new, your personal credit is more likely to be considered. Check your personal credit to make sure you have a respectable credit score before applying for a business credit card. Try to repair your credit if it’s bad before you apply. This might be as easy as contacting the credit bureaus to get the negative information removed.

3. Boost Your Company’s Cash Flow

If you want to increase the appeal of your application for a business credit card after improving your personal credit score, make sure you can demonstrate a healthy cash flow. It makes it obvious that before extending you a line of credit, lenders would want to ensure that you have a steady source of income.

Increasing revenue is the apparent approach to enhancing the cash flow of your business. Your company’s cash flow will typically be in better shape as sales increase.

Attempting to cut costs for your business is another option. This slows down your rate of cash consumption and gives the lender more assurance that you’ll manage your credit limit well.

4. Examine Your Options for Business Credit Cards

When you are prepared to submit an application for a business credit card, it is time to begin weighing your possibilities. Business cards are available from a number of credit card companies, including Chase, American Express, and Capital One. Make the decision that is best for your company after weighing your choices.

Card Charges

The price of the card is one of the first items to consider. The card’s annual fee, international transaction fees, ongoing interest rates, and any introductory APR are all included in this. Choose a credit card with a low or no annual fee. A low initial APR is also a significant benefit if you want to use the card to fund a major purchase.

Opening Bonus for Your Account

If the card gives an account opening bonus is something else to consider. When you open an account with a card issuer, many of them will offer you discounts on balance transfers and other account services. If you make a sizable purchase using the card, you might also be eligible to get a sign-up bonus.

Permanent Rewards

Consider the ongoing benefits in addition to the account opening incentive. When making purchases for their company using the card, rewards enable small business owners to save money or obtain other benefits. 

Travel awards, reward points, cash back, and other advantages are a few examples of these extras. Take the time to research your options because different lenders have different reward partnerships and schemes.

Numerous card issuers cater their card incentives and features to specific kinds of businesses. Consider a card with a larger points rate for gas purchases, for instance, if you own a shipping company that makes significant gas station expenditures. Look for a card that pays more at office supply stores if you spend the majority of your money there.

Features of Business Management

Additionally, have a look at the tools and management options that the card issuer offers. For instance, you might need a mechanism to give your employees spending restrictions if you intend to provide them with employee cards. 

In order to make managing your business easier, some cards also offer benefits like discounts on business services or interfaces with programs like Quickbooks.

5. Make a Business Credit Card application.

You are prepared to submit an application once you have chosen the small business card you desire.

Both personal and professional information must be provided when applying for a company credit card. The card issuer can make a loan judgment by using this information to assess your personal credit and discover more about your company’s finances.

You need to be ready to offer:

  • Your name
  • Your birthdate
  • Your Social Security number
  • Your address
  • Your phone number
  • Your annual income
  • Your monthly housing payment

Additionally, you must be prepared with the necessary business data:

  • Your business name
  • The legal structure of your business
  • Your business Employer Identification Number, if it has one
  • The industry you operate in
  • Your business address
  • Your business phone number
  • Your business revenue
  • The number of employees you have
  • Your estimated monthly business spending
  • How long you’ve been in business

Bottom Line

Keeping your business finances distinct from your personal accounts is made simpler with a business credit card. Receiving a rewards card also implies that you can be compensated for purchases made on behalf of your business.

There are a lot of small companies you can operate out of your house if you’re considering starting a business but are unsure of what kind. By providing you with quick access to cash, using a business credit card can help you launch your new firm. 

Just bear in mind that, like personal credit cards, corporate credit cards have high-interest rates and that you’ll need to be prepared to pay back the money you borrow.

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