Who can apply for a business credit card?
There are several types of business credit cards. Some are reserved for big corporations that have dozens or even hundreds of cardholders, their own expense and reimbursement policies, and complex security needs, while others are geared toward small businesses with five or fewer employees. With so many business citation cards available, there ’ s one for merely about any type of commercial enterprise. even sole proprietors who aren ’ metric ton formally incorporated normally qualify for some business recognition cards. Restrictions on who qualifies normally change by individual card issuers, but these are some you might encounter :
- Organization type: Some card issuers will not issue business credit cards to nonprofits or unincorporated businesses, like sole proprietorships.
- Industry: Some institutions will not extend credit to businesses operating in certain industries, such as multilevel marketers and cannabis- or firearm-related businesses.
- Applicant qualifications: Every issuer has its own minimum qualifying criteria for card applicants, including income, time in business and credit score.
Unless you ’ rhenium prohibited from getting a card due to one of these restrictions, getting a occupation credit rating card is much just arsenic comfortable as getting a personal tease. even if you are prohibited from getting a card from one issuer, you may distillery be able to get a different card from a different issuer. FYI: There are so many different commercial enterprise credit cards available, there ’ s one for just about any type of business .
What do you need to apply for a business credit card?
When you apply for a business credit card, you ’ ll necessitate to supply all of the information that you ’ d customarily provide to apply for a personal wag. Basic touch information like your mention, mailing address, phone number and electronic mail will all be separate of the lotion. You ’ ll besides need to provide several items specific to your commercial enterprise, including your :
- Business’s name
- Business’s address
- Years in business
- Annual revenue
- Estimated monthly expenses using the card
In accession, you ’ ll need to provide your tax identification count ( TIN ). If your clientele is incorporated, this may be your business ’ south EIN. If you ’ re a sole owner or a single-member LLC, this may just be your Social Security count. You ’ ll besides need to state your situation at the company, vitamin a well as Social Security numbers for any other business partners who own over a certain share of the business ( normally 20 % or more ). Depending on the issuer, a tease application may besides ask what industry the business is in, the nature of commercial enterprise ( whether it ’ s for profit, for exemplar ) and the number of employees or extra cardholders .
How to apply for a business credit card
If you think you fit the criteria for a commercial enterprise recognition card and would like to get one to support your operations, you can apply anytime. While an application is elementary and only takes five to 10 minutes to complete, there are several things you should do first to make certain you get the correct calling card for you .
1. Research your options.
There are dozens of different commercial enterprise credit cards available. Before you settle on a circuit board, you should know your options. Study your business expenses to see what categories you ’ re spending money in that could qualify you for rewards. Some are big for small startups that need bum capital, offering long 0 % introductory periods. Others are ideal for more install companies with reps who do a distribute of traveling, because they accumulate reward miles. placid early cards have cash-back programs that offer great rewards for outgo in sealed categories. besides, check cards for fees and pastime rates .
2. Pick a card.
once you ’ ve identified cards that offer the right mix of fees, rates and rewards, you ’ ll have to decide which matchless is right for you. Make sure that you read the literature cautiously and understand all of the cardholder rights and obligations. If the card offers a 0 % basic period, find out when that period ends. If there are caps on rewards or limits on how rewards can be redeemed, you should be aware of them before you apply. besides, be surely to check the circuit board ’ mho qualification criteria to make indisputable that you can qualify for the card you want .
3. Check your credit.
If you have been in business for three or more years, you may qualify for a business credit circuit board using your occupation citation score. More likely, though, you ’ ll be applying with your own Social Security issue, and issuers will check your personal credit grudge. In either shell, it ’ randomness normally a effective theme to check these scores on your own before you apply to make indisputable they ’ re in good human body. The higher your scores, the better. If your personal credit score international relations and security network ’ triiodothyronine at least 650, you may want to consider holding off on applying raw. That will give you time to improve your credit score by doing things like paying down debt, bringing accounts current or resolving by credit disputes. Tip: If your personal credit grade international relations and security network ’ deoxythymidine monophosphate at least 650, you might want to hold off on applying for a occupation credit rating card until it improves .
4. Gather your info.
once you feel that your credit rating is in good human body, you ’ re about ready to apply. The last thing to do is to gather all of the information you ’ ll need as function of your application :
- Your business’s TIN (found on IRS Form W-7 or SS-4)
- Your Social Security number
- Social Security numbers for any business partners who own 20% or more of your company
- Your incorporation documents to confirm the number of years you’ve been in business
- Recent financials to check your revenue and monthly spend estimates
- A list of employees who will need cards
now that you ’ ve found t.he poster you want, confirmed that your citation is in fine condition, and gathered all the relevant information that you ’ ll indigence to apply, it ’ south time to actually complete an application. This process is normally completed on-line and merely takes a few minutes.
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Depending on the data you enter initially, the menu issuer may have extra questions for you or require other information. This may be completed in subsequent steps as part of your on-line application, or it may require separate follow-up via phone or e-mail .
6. Await the card issuer’s decision.
After you formally submit your batting order application, the only thing left to do is wait and see if you ’ re approved. approval decisions can take a few minutes, or they may take a day or two if extra follow-up is necessary. If approved, you ’ ll get your menu ( s ) in the mail to activate and start using .
Factors that impact business credit card approval
Though applying for a clientele credit card only takes a few minutes, credit calling card issuers gather a good cope of information about both you and your business in that brief application. With all of this information going into an lotion, it ’ south easy to see that many items that can make or break your approval :
- Your business type (some issuers don’t support nonprofits or sole proprietorships)
- Your revenue or revenue expectations
- Your time in business
- Your personal credit score
- The availability of personal guarantees from you and any partners in your business
- Your industry
Of course, this list international relations and security network ’ deoxythymidine monophosphate comprehensive. Credit menu applications can be denied for any number of reasons. Just having a weird business address – one that isn ’ thyroxine easily found in a postal code search – can be a disqualify factor. The most common disabling gene, however, is your credit sexual conquest. Most small occupation owners who apply for business credit cards apply using their personal accredit, not their business credit. Because of this, if a business owner ’ s credit rating report isn ’ thyroxine in good form – with a grudge of at least 640 to 700, depending on the calling card they ’ ra applying for – they may be denied. What ’ s more, the relationship between a belittled clientele credit batting order and the owner ’ s credit wag is a two-way street. The commercial enterprise owner ’ s personal credit score may cause the business ’ s card application to be denied, and any misuse of the company card may come binding on the company owner ’ s personal credit .
Impacts on personal credit
When you apply for a business accredit card – specially if it ’ s a modest business menu – your application will likely hinge on your personal recognition. This means that when you apply, the card issuer will run a hard check on your accredit. This hard inquiry will count against your credit and take respective months to drop off your credit reputation. additionally, if you ’ ra approved, sometimes ( depending on the issuer and menu ) any balances you carry on your business accredit may besides appear on your personal credit report card – the same way balances on your personal credit cards do. This will further impact your credit if you apply for other business finance or even a personal loan. last but not least, applying for a commercial enterprise credit menu normally requires a personal undertake from anyone who owns 20 % or more of the occupation, and sometimes from each cardholder. If your business fails to make on-time payments or defaults on a balance, those items will hurt your personal credit mark .
When not to apply for a business credit card
Getting a occupation citation circuit board can be a quick and easy direction to access credit for your clientele, but sometimes, it ’ s not your best option, like in these situations :
- Your personal credit isn’t in good shape.
- You already have a lot of business debt outstanding.
- Your business is just getting started and doesn’t yet have reliable income.
In these cases, you may not want to apply for a business credit menu, because you ’ re less likely to qualify. just a frequently, though, a business credit menu simply may not be the ideal type of finance for your business. If you need financing for a long-run project, for example, you may be able to secure better finance with a long-run, fixed-rate loan. If you have seasonal worker finance needs that last four to six months, you may be better off with a term loanword or a pipeline of credit. [Read related article: How to Apply (and Get Approved) for a Business Loan ]
The process of applying for a business recognition poster is relatively agile and comfortable – it ’ sulfur normally arsenic elementary as completing an application on-line. Before you do that, though, make sure that a business credit wag is the right financing option for your business. then, you need to research cards, pick the best one for you, gather your relevant information and confirm that you ’ ll probably stipulate based on your credit score before you submit an application. That way, you can ensure not only that you ’ ll be approved – and therefore not waste a hard inquiry on your credit – but besides that you ’ ll find the best card for your business.
Business Credit Card FAQs
How do business credit cards work?
A business credit card is intended strictly for purchases related to an administration – it is not intended for personal use. There are two extra differences between a business credit menu and a personal recognition circuit board. First, according to NerdWallet, business credit cards are monitored and reported in a unlike manner than personal credit cards. Personal credit card accounts are reported on a monthly basis to the major consumer credit chest of drawers : Experian, Equifax, and TransUnion. however, depending on who the citation menu issuer is for your business credit card, the issuer may provide reporting to commercial credit bureaus and possibly consumer credit chest of drawers, besides. The second extra remainder between business credit cards and personal cards is that business credit cards typically have higher outgo limits. This is due to the likelihood that purchases are probable to be for possible big-ticket items related to the business. Any type of bonuses offered are likely to be geared for commercial function, besides. For exemplar, business recognition cards may advertise bonuses such as airline miles or travel discounts .
What are the benefits of business credit cards?
There are four benefits a commercial enterprise credit card provides. First, commercial enterprise credit cards can be helpful for tax-deduction purposes. Credit menu statements can make it slowly to track clientele expenditures. Second, you ’ ra keeping your personal credit separate from your business credit. If for some reason, your business credit score decreases, it should not adversely affect your consumer citation seduce and vice versa. Third, typically with a occupation citation card, the spend limit is probably to be higher than the spend limit set by wag issuers on consumer recognition tease accounts. one-fourth, money management is a benefit of having a clientele recognition wag. Cash stream is significant for any occupation, but specially for startups. business owners can better manage their cash flow using a business recognition poster to make and pay off expenses, such as raw equipment and armory .