If you’re an entrepreneur with a business credit card, are you really aware of this condition?  Do you fully understand your obligations as the card holder?  In order to be clear on this issue, let’s talk about how personal liability applies to business credit cards.

Personal Liability and Small Business Credit Cards

If you’ve just started your business and you have not yet established your business’s credit history, your potential lender or your credit card company would take your personal credit report into consideration.  If your personal credit history qualifies with the credit card’s requirements, chances are your application would be approved.  Nevertheless, you’ll be subjected to the personal liability statement on your contract.

Read more Personal Liability on Business Credit Cards

Detailed report. Aside from the monthly billing statement, business credit cardholders are sent an annual summary report of all purchases made for the previous year. The report can also be downloaded from the internet by logging in to the account. These can be used as references when performing accounting tasks and in preparing business tax forms. Since these are detailed reports, it will be easier to identify which of your business costs are eligible for tax deductions.

Build corporate credit. One very important advantage of using a small business credit card is the opportunity to establish and build new business credit. Compared to loans, it is generally easier to obtain a business credit card, even for start up businesses. By building an impressive credit history, you are also preparing a solid foundation for your company so that you can get approved for future business loans without a problem.

Simplify administrative tasks. Certain features provided by business credit cards can simplify business tasks which can otherwise be complicated. For example, by distributing employee credit cards, small purchases or emergency expenses can be charged to the business credit card account immediately, without the need to go through the long process of requesting for funds. All bills that are charged to the employee credit cards will reflected to the main account so business owners can easily keep track of their employee’s spending.

Rewards and privileges. Some credit cards for business offer varying reward programs to match different types of businesses such as Frequent Flyer Miles, Gas Rebates, Hotel Rewards, and Cash Back. Thus, with each credit card purchase made, an entrepreneur earns points which later on can be exchanged for rewards. Aside from these incentives, business reward credit cardholders can also enjoy discounts and perks that are exclusively only to members of the reward program.

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Stretch your cash flow. Credit cards for business can be a great help during times when you need to pay a bill or make a purchase but cash is not readily available. In this situation, a business owner can charge the expense to his/her small business credit card and pay the debt by the due date.

Enhance your company’s image. Using a business credit card for payment can also enhance your company’s image. Instead of having your personal name on your credit card, you may choose to have your company’s name printed on the card. It’s a great way to introduce your new business to vendors and suppliers in the market.

Boost Your Business Potential with Small Business Credit Cards

Some people may say that personal credit cards can be used for business so why bother to get a business credit card?

Business credit cards are great tools for building business credit. Business credit cards are easy to acquire than business loans so they are ideal for new and start-up businesses. As you spend with your credit card and pay off your monthly charges on time, you are strengthening your corporate credit.

A solid corporate credit is essential for a company’s future growth. Indeed, acquiring the financing you need from potential lenders will greatly depend on the status of your business credit. After two years of credit card use, you should have already made good business credit standing for your company.

Business credit cards can help entrepreneurs manage their finances more efficiently. Aside from monthly billing statements, a yearly account summary report is also provided which can be used as reference in checking inventory and in preparing your business taxes. When tax season arrives, it would be easy to distinguish tax deductible purchases from those that are not.

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Getting Rewarded from Business Credit Card Spending

There are credit cards for business that reward entrepreneurs for their spending. Most business credit cards with rewards offer bigger incentives. As a business owner, you should take advantage of this opportunity to get more from your spending.

Because reward points are earned based on how much you spend with your credit card, small business credit card holders have the chance to get more points and earn bigger rewards than personal credit card holders do.

Reward programs vary depending on the type of business credit card you choose. Some offer travel rewards while others offer gas rewards and cash back. By choosing a reward business credit card that complements the needs of your company, you can surely make the most of what your credit card offers.

Myth #1: Small business entrepreneurs or home based business owners don’t have to be concerned about the status of their business credit.
Whether you own a home based business or a small business, it is important to build business credit. Keep in mind that all creditors, insurers and investors will check your business credit profile to determine if your company is a worthy investment.

When applying for a business loan, having an impressive business credit can win you quick approval and the best rates from lenders. In fact, pre-approval for a business loan is usually done using an automated system. Hence, if you don’t have business credit or your business credit rating falls below the credit requirement, your application will automatically be rejected.

Myth #2: There’s really no need to check my business credit profile often.
Registering with a business credit bureau is only the first step. After establishing your business credit, it is important to monitor your credit profile on a regular basis. Business credit trackers like Dun & Bradstreet and Experian (Business) update their files regularly so you need to make sure that the information in your report is accurate. In case you find errors, you should immediately get in touch with the business credit tracker so that errors can be corrected.

Myth #3: Newly start up businesses doesn’t have to be as concerned about their business credit as long time businesses do.
The size of your company doesn’t matter when it comes to building business credit. Whether you are a newly-established business or an older company, you still need to maintain good business credit. How? By managing your credit accounts responsibly and paying your debts on time.

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Myth #4: Your cash flow doesn’t have anything to do with the status of your business credit.
When in need of business financing, having a solid business credit history will surely work to your advantage. The interest rates, credit limit and repayment terms that you will be provided with will also greatly depend on your credit rating. Needless to say, the higher your business credit or Paydex score is, the better deal you can get from potential lenders.

Most lending companies that offer unsecured line of credit do require that you have been in businesses for at least two years. A good personal and business credit standing is another basic requirement to be eligible for an unsecured line of credit.

This type of business funding can be acquired for various purposes such as purchasing additional equipment, purchasing stocks or raw materials, renovating the office space, and to cover for unexpected expenses.

The great thing about having an unsecured business line of credit is that financing is readily available at any time you need help. There is no need to wait for months for your business loan application to get approved. Once you are given a business line of credit, your business will have a reliable source of financial support.

Business Credit Cards – Unsecured Credit Line for Businesses

Credit cards for small business are a great example of unsecured credit line for business. Compared to business loans, it is technically easier to get approved for a business credit card even for new or start up businesses with no business credit. In fact, business credit cards are often used for building business credit.

If you are a new business owner, your personal credit history will be taken into account. Needless to say, you need to have good credit history to be approved for an unsecured business credit card. Before submitting application to your chosen business credit card company, it is recommended that you check your personal credit report first to make sure that you meet the credit requirement. Take note that if your credit card application gets rejected, your personal credit score can drop by a number of points.

Once approved for a business credit card, you will be provided with an unsecured line of credit, depending on your credit rating. Of course, the higher your credit score is the higher credit line you will be provided with.

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It’s also important to choose a business credit card that will report your payments to major business credit trackers so you can build a separate business credit. Don’t forget to register your company with Dun & Bradstreet- the leading business credit tracker in the country.

As you use your business credit card to pay your bills and business expenses, you are building your business credit at the same time. Manage your credit line effectively by keeping your credit usage minimal and submitting your payments on time.

Another advantage of owning a business credit card is to build a solid credit history for your company. By charging business expenditures to your credit card and paying off these debts on time, you are also building your business’s credit. After a few months to a year of timely payments, you should enjoy an excellent business credit standing. Why is this important?

An excellent credit prepares your business for its future growth and expansion. By the time that you’ll need bigger financing for your business projects, an outstanding business credit will give you the power to get instantly approved by potential lenders. Furthermore, an impressive credit will give you the opportunity to enjoy the best rates and terms for your loans. Speaking of the best rates and terms, zero interest business rates are definitely worth considering.

Read more Get Real Benefits from Low Interest Business Credit Cards

Unfortunately, there are businesses that have been in operations for two years or more but without small business credit. As a result, they find it difficult to get approved for unsecured business loans because they were not able to establish a respectable business credit profile.

It is important to understand that building business credit is different from building your personal credit. Take note that credit reporting agencies that track consumer credit are different from credit bureaus in charge of creating credit reports for businesses.

How to Build Small Business Credit

In order to build small business credit, you will first need to declare the legal entity or corporate structure of your company. This step involves getting proper business licenses required by your State government. Legally incorporating your business is an essential step in building business credit and is the only way you can protect your personal assets in case the business doesn’t go as well as expected.

Next, you need to make sure that you are a registered company with a major business credit tracker like Dun & Bradstreet and Experian for Business. It is strongly recommended for business owners to establish business credit as soon as they start the operations of the company.

To build small business credit, you must choose lending companies that will report your payments to major business credit trackers. If you get approved for a business loan, be sure to submit your monthly loan payments on time.

Generally, it is easier to apply for a small business credit card even if you have no business credit. In fact, credit cards for business are great tools for building corporate credit. When applying for a business credit card, see to it that business credit reporting will be provided.

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As you make payments to your creditors and manage your business line of credit efficiently, you are building your small business credit one step at a time. Through correct debt and repayment management, you should be able to build a solid business credit standing in two years or less.

Can business credit cover for a bad personal credit rating? If you have a problem with your personal credit, the best thing to do is work on rebuilding your rating while building your business credit at the same time. As the owner of the business, enjoying good standing on both your personal and business credit will surely impress potential lenders, insurers and investors.

Build Solid Corporate Credit
For a new business, establishing corporate credit history is crucial and has to be accomplished right away. Without corporate credit, it would be more difficult to convince potential lenders to provide financing for the company.

Being the business owner, your personal credit history will closely examined by the business credit card company when you apply for an account. If you have an impressive personal credit rating, you can quickly get approved quickly and receive your business credit card within a few days. However, for entrepreneurs who have a problem with their credit rating, a secured business credit card is the next viable option.

See to it that your chosen business credit card issuer will report your payments to Dun & Bradstreet- the leading business credit tracker, as it is the only way to build corporate credit. It is important to understand that consumer reporting agencies are different from business credit bureaus. After a year or two, you should have already built a business credit history that will give you more confidence in seeking out loan options.

Effective Administrative Task Management
How can you use a business credit card to make administrative tasks more manageable? A lot of business credit card issuers provide an Online Account Access feature so you can monitor your account straight from your computer at any time.

If have employees, you can also distribute supplementary cards to a selected few so they can simply charge small business expenses to the account, without having to go through the time-consuming process of filing for cash request. Each card will be linked to your business credit card account so the you will still be able to monitor employee spending.

Accurate References for Accounting

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Aside from monthly billing statements, you will also receive an annual summary report from your business credit card company. The summary contains a detailed report of all your credit card transactions for the whole year, including the date the purchase was made, the type of purchase, the amount rendered, and other useful data, which is why they make indispensable references in performing inventory or accounting tasks.

Come tax season, the account summary can be used as reference so you can easily determine which purchases are qualified for tax deductions. Usually, the report can be downloaded online so it can be used together with the accounting software (ex. Quickbooks) that the business owner uses.

Small Business Credit Cards – Wonderful Financing Tools
Even if you are managing a home business or a small enterprise, you can still qualify for a business credit card. Today, credit card companies have introduced credit cards that are especially designed for small businesses.

What are the benefits of using a business credit card? First, you don’t have to spend cash all the time to cover for your expenses. In case you need to pay for something or purchase an item in a hurry, yet you don’t have cash on hand, you can charge the costs to your credit card and pay it back by the end of the month or by your card’s due date of payment.

Business credit cards also enable you to keep track of your spending more conveniently. Once approved, you will be sent monthly billing statements so you can review your purchases for the previous month. You can also log-in to your account online to monitor your expenses. Quarterly and yearly account summaries can also be downloaded from the website so you can use it with the accounting software you use.

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Applying for A Business Credit Card
What if you have just started your company? Can you still acquire a small business credit card? The answer is yes. In fact, you can easily get approved for one despite not having business credit card. Yes, you can use your business credit card to build your business credit history.

Nevertheless, your personal credit history will be reviewed once you submit a business credit card application. Of course, if you have an impressive credit rating, you can surely get easily approval and the lowest rates as well.

What about secured business credit cards? These credit cards for business are recommended for business owners who have a problem with their credit rating. As with a personal secured credit card, a secured business card will also require the submission of cash deposit as a guarantee for your debts. If you have good credit, you can open a regular business credit card without submitting cash deposit.

As you use your business credit card for important purchases, you are building your business credit. However, take note that not all issuers of business credit cards provide credit reporting service. To build business credit, you must make sure that your chosen credit card for small business will report your payments to major business credit report trackers.

Comparing Small Business Credit Cards
Unlike corporate cards, the application process for a small business credit card is much simpler. If you’re a business owner, you can easily fill out an online application and wait for a few minutes to receive approval. You can also compare different small business credit cards by reading online reviews and checking out comparison websites.

As with a personal credit card, the rate of interest is a primary factor to consider. Of course, you should look for a business credit card that offers a reasonable APR. However, a low APR does not guarantee a really good credit card. Aside from a reasonable rate, be sure to evaluate the rest of the fees (annual fee, late penalty cost, transaction fees, etc ) associated with your business credit card.

Small Business Credit Cards With Rewards
If you want to acquire a business credit card with rewards, you should carefully study the type of reward offered. To really benefit from the reward program, it is very important to find a credit card that matches with the nature of your business.

For instance, if you’re into a buy and sell business, you may consider a business credit card with cash back rewards. If your business requires you to travel abroad a few times a year, then you can save a great deal from your travel expenses by getting a business reward credit card with Airline Rewards or Frequent Flyer Miles Rewards.

Keep in mind that some issuers of reward credit cards for small businesses strictly require good to excellent credit. Is your credit rating enough to qualify for your preferred business credit card? Watch out! If your online application gets rejected, it can inflict damage to your credit score.

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Choosing Your Business Credit Card
After spending some time comparing different business credit cards, list down your top three choices and be prepared to conduct a deeper evaluation of each one. Aside from good rates and fees, make sure that the business credit card comes with features or functions that will help you with your business management tasks.

Read and understand the complete terms and conditions. Remember that the real deal will be revealed in the agreement. No matter how attractive the advertisements are, it’s the Agreement page that will tell you the truth about your business credit card.