How to Get a Business Credit Card for Small Businesses

by Emily Rhodes Bad credit loans from direct lender

The idea of having a business credit card is appealing for the owners of small businesses. The added benefits of bonuses, extra credit limit, and the introductory offers are what make it a popular choice.

For freelancers, it incorporates the need for guaranteed same day loans for unemployed in case they need money instantly.

The process of getting a business credit card might seem intimidating for some. On the contrary, the process is similar to the personal credit card. You can get it even for a side hustle or a business that hasn’t made money yet. Here’s how you can apply for a business credit card if you own a small business.

Business or Personal Credit Card

Both the credit cards, business and personal, work on the same principle. The lender will pay for you and in return charge interest for the money. You can earn rewards in both cards. However, business cards tend to offer bonus rewards on expenses such as travel, restaurant bills, and office supplies.

The credit limit is more when compared to personal credit cards. There might not be a 0% APR for the first few months or a year in the case of the business cards. However, these cards have a more comprehensive credit reporting.

In simpler words, the business credit cards are offered with offers and policies tailored to business expenses.

What are Small Businesses Eligible?

When we speak of small-businesses, you need to have a for-profit enterprise. Those businesses who haven’t earned any profit yet can still apply. Apart from a for-profit enterprise, any side hustle is also considered eligible for these credit cards. It includes selling something on an e-commerce platform or lending your property to some big private firm.

The freelancers and independent contractors are also a small-business for many lenders. However, the eligibility depends on numerous other factors, including the credit ratings of the business owner.

Information Asked by Lenders

The process of business card application is not much different from a personal credit card. You need to check eligibility and apply for it. The card issuer will ask for certain information to set a credit limit and assess your credibility. It can be business-related or personal. The details required are mentioned below.

Name of the Business: You should put the legal name of your business here. Those who work as consultants, freelancers, or don’t have a name for the business can use their name.

Tax ID Number: Social security numbers for businesses with no separate tax ID is valid for this field. Entrepreneurs generally don’t have a tax ID for their new businesses.

The date on which the business was Started: The field doesn’t require explanation.

Type of Industry: Here, you need to mention the kind of industry your product and services belong to. It can be construction, e-commerce, transportation, and many more.

Entity Type or Legal Structure: The way your business is organized is described in this field. Small businesses commonly lack the formal organization structure, like LLC, corporation, or partnership. You can call them sole proprietorships since they are owned and managed by a single individual. This individual is the business for the card-issuing company. The freelancers, online traders, independent contractors also come under this category. Just like any other business structure, the sole proprietorship is eligible for business credit cards.

Address and Contact Details: Put the address and phone number of your business instead of your personal. However, if you don’t have any, you can still use your personal information.

Details of Person Owning more than 25% Business Stakes: The lenders can ask you details about other people who have own more than 25% of the business. You must mention their name, social security number, date of birth, and address if it is asked.

Annual Revenue of the Business: The money your business makes in a year is its annual revenue. Do not confuse it with the profit earned by it. You can put £0 if your business hasn’t made any money yet.

After filling the application form, the card issuer will assess your financial situation and offer you a credit limit. After agreeing to it, you will receive your business credit card in your mail within the stipulated time.

Effects on Personal Credits?

The card issuers generally assess the personal credit of the business owner. Therefore, maintaining a good credit history is essential to get a better offer for business cards. The actions on your business card will be reflected in your credit history.

The negative impact is imminent if the dues are not paid on time. The company may not report useful information to the personal credit bureaus. You must use the business credit card responsibly to avoid the negative impact on personal credit. 

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About Emily Rhodes Advanced   Bad credit loans from direct lender

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Joined APSense since, July 7th, 2015, From 11 East Laith Gate, DONCASTER, DN1 1JG, United Kingdom.

Created on Oct 28th 2020 06:35. Viewed 257 times.


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