When you have a small business, credit is just as important as if you are an individual. Usually, new businesses don’t have the capital to fund all of their ventures and expenses. Therefore they turn to banks and other credit services to provide credit cards for expenses. Since business owners are discouraged from using their personal credit cards for business expenses, small businesses are encouraged to obtain their own line of credit.
Getting a business credit card may seem like a bad idea, but it actually can help you if it is handled well. It can simplify business operations, provide bonus awards, and keep track of your business expenses. The following are a few ways for small businesses to get their own credit cards.
In order to obtain the best credit card for your business, check your personal credit score. Creditors may look at your score to determine if you’ll be able to pay back your company’s debts. If your personal credit is shot, banks are less likely to think you’ll be capable of keeping a business’ credit pristine. Generally, individuals with personal credit scores of over 700 will be approved for company credit cards.
Another good way to obtain a credit card is to register your business with the state. You’ll have to do this anyway, but becoming officially recognized by the state will give your business more credibility. Once you’ve registered your business, you can begin the process of filling out the credit card application. This includes basic information like the owner’s name, business address, employer identification number, etc. As time goes by, your business will hopefully build a positive financial history and gain access to additional lines of credit that will allow it to make bigger purchases that will move the business forward.
Once you’ve obtained the business credit card, limit the people who have access to it. This is to avoid instances of fraud and to keep employees from mixing business and personal transactions. Putting personal transactions on company cards could get you into trouble with the IRS.
Getting a small business credit card for your company can help new owners in a number of ways. It will help manage funds, give the company credibility, and may even allow for more lines of credit that will give the company more flexibility in purchases that will help it grow. High risk merchants often have a difficult time securing credit cards. High risk merchant account managers like eMerchantBroker.com, can offer them small business loans to give their companies a boost forward.