How To Apply For And Get A Business Credit Card

Applying for a business credit card is simple but requires diligent research and preparation, like any financial decision. Before you apply, be sure to do the following:

1. Determine Your Eligibility

All types of business structures can apply for a business credit card. That includes:

• sole proprietorships or freelance work
• partnerships
• limited liability companies
• corporations

The size, age or nature of your company doesn’t matter for business card eligibility. You can apply for a business credit card even if you founded your company last week. As long as you intend to make a profit from selling goods or services, you have a business. So don’t count yourself out if you’re a part-time freelancer or an eBay seller—these are legitimate businesses.

The first step in applying for a business credit card is determining which cards you have a realistic chance of qualifying for. Generally speaking, a credit card issuer will evaluate your personal credit history to determine whether your business qualifies for a credit card. That means it’s important to maintain healthy spending habits and regular payments on your existing personal accounts to maintain a strong credit score and improve your chances of getting a business card.

Major business assets and revenue can also help your odds of approval as well as qualify your business for a higher credit limit. But if your business is new, the approval decision will depend almost entirely on your personal credit history.

2. Gather Required Information

A business credit card application will usually ask for information such as:

• Business name
• Business address
• Annual business revenue
• Number of employees
• Estimated monthly spending on the credit card
• Employer Identification Number (EIN) and/or owner’s Social Security number
• Business structure
• Business description

Note that if your business doesn’t have an EIN, you can submit your SSN in its place.

Most business card applications will also require the owner’s personal information since the owner will be expected to give a personal guarantee. The credit card issuer may have follow-up questions about the business during the application process. Be honest and provide any documentation requested. Even if your new business’ current income is low or nonexistent, it’s better to disclose this. Be ready to discuss your business and plans for its growth.

It may help to seek out business credit cards offered by banks you already have a relationship with—this can make the application process more comfortable, efficient and successful.

How To Get a Business Credit Card With Bad Personal Credit

Since business card approval usually hinges on your personal credit history, getting a business credit with a less-than-stellar personal credit report can be challenging. Your options will likely be limited to secured business credit cards requiring a security deposit.

How To Get Approved for a Business Credit Card

There’s no way to guarantee approval on any credit card application, but there are some things you can do before applying that should increase your chances of success:

• Avoid maxing out any personal or business cards you already have.
• Apply for new credit sparingly to minimize hard inquiries on your reports.
• Identify the correct business structure to list—for example, if you sell handicrafts on Etsy or write freelance articles online, you might be operating as a sole proprietor.

Responding to a credit card pre-approval offer may also improve your odds. The card issuer will check your credit once you submit a business card application online. After the credit check is complete, cardholders deemed creditworthy by the lender may see an approval.

How Do Business Credit Cards Work?

Credit cards for businesses can be similar to personal credit cards in terms of perks and reward structures, but many offer higher spending limits and improved reward earnings for business-specific categories such as office supplies, advertising and shipping expenses. Business credit cards also provide business-focused features such as tools to help track spending across various categories or by employee cardholders. With most business cards, expense information is available for download to your business accounting software, making record-keeping easier.

Your business doesn’t need an employer identification number (EIN) to apply for a business credit card. The owner’s SSN will usually be required in the application process. In most cases, the owner is expected to provide a personal guarantee for the business credit card so their personal credit history is used to determine business creditworthiness.

However, if your business has an EIN, it’s beneficial to provide it in addition to the owner’s SSN when applying for a business card as the EIN identifies the business to commercial credit bureaus and helps to establish business credit history.

Business credit cards are useful for establishing, growing and sustaining a business. Here’s what business owners need to know:

• All business structures are eligible for a business credit card, including sole proprietors, limited partnerships and corporations.
• In almost all cases, the owner’s SSN is required in the application process since the owner must provide a personal guarantee for the business credit card.
• Business card benefits include better record-keeping for tax purposes, short-term access to funds and a separate business credit history.

Learn more on business credit cards here...