The Secret Formula to Getting Business Credit Cards
Everything you need to know about unsecured business credit cards is covered in this
article. There are numerous business credit card firms that will help your startup business obtain
up to $100,000 in business credit. Applying for company credit cards could result in an APR as
low as 0%. You could avoid providing a personal guarantee or a credit check if you know how to
get the greatest incentives for business credit cards.
What is an Unsecured Business Credit Card?
Almost all credit cards, especially those used for business, are unsecured. Consumer
credit cards are typically secured to aid in the development of initial credit. Businesses use net
or vendor accounts instead of secured credit cards. Vendors frequently offer net 15, 30, or 45
terms, which means you have that many days to repay whatever your company is borrowing.
Choosing Business Credit Cards that Report
Another consideration when selecting a business credit card firm is whether they report to consumer credit reporting organizations, business credit reporting agencies, or neither. Business owners should look for credit cards that particularly report to business credit bureaus. Consumer credit cards may affect your company credit scores because they account for at least 30% of your consumer FICO score. A Capital One Spark card is one example. It's a fantastic business card, but it reports to government and consumer authorities. As a result, every time you use that card, your personal credit will suffer. The top business credit cards report to commercial credit bureaus including Dun & Bradstreet, Equifax, and Experian.
Personal Guarantees on Business Credit Cards
Another issue to consider is whether you are personally guaranteeing corporate credit cards. In most circumstances, providing your social security number and credit check to acquire clearance entails providing a personal guarantee. Personal guarantees imply that you, as the major entrepreneur, are personally liable for debt if you ever fail to pay off that credit card. Personal assets such as your bank account, home, vehicles, stocks, and bonds are at risk due to liability. As a result, whenever possible, avoid personal guarantees and credit checks.
How to Get Credit Cards Without a Personal Guarantee
You must first establish company credit fundability in order to receive credit cards without a personal guarantee or credit check. Obtaining initial startup vendors such as Uline or Granger can aid in the expansion of your company's credit history. Starter merchants will provide you credit even if you don't have any and will report to business credit reporting organizations once you have payment history. Once your company has numerous accounts reporting, you can start getting credit at stores like Home Depot, Lowe's, Sam's Club, Costco, Walmart, Best Buy, and Apple. When you have at least 14 payment experiences, you can apply for credit cards such as VISA, MasterCard, and American Express
Personal Guarantee Options
If you don't mind providing a personal guarantee, Credit Line Hybrid is an excellent option for your business. Startup enterprises can use Credit Line Hybrid to acquire up to $150,000 in credit lines with 0% APR rates. Credit Line Hybrid is categorised as unsecured borrowing, which means no collateral is required. There are no minimum revenue, bank statement, or tax return requirements. The only criterion is that you have good personal credit, which you can borrow from a friend or possible investor. Credit Line Hybrid allows you to receive 5 to 8 times the quantity of credit limitations. Many of these accounts also provide information to commercial credit reporting bureaus.