Business credit card approval and preapproval: What to know

Quick insights

• Reviewing the eligibility requirement for a business credit card may help you better understand your chances of approval. 
• Common business credit card eligibility requirements include revenue thresholds or a minimum credit score.
• A credit score is one of the most important factors that a card issuer uses in the approval process. 

A business credit card can be a useful financial tool for small and large businesses alike. There are many types of business cards available to companies—some of which cater to business travelers while others offer the ability to earn rewards on common business expenses. 

Before business owners can use a credit card, they need to be approved. The approval process helps credit card issuers determine whether a business is a financially viable prospect. In this article, we’ll cover a few important things to know about approval and preapproval for business credit cards. 

Understanding credit card preapproval

Preapproval is a preliminary assessment by a credit card issuer to determine your eligibility and likelihood of credit approval. To determine if an applicant is preapproved for a credit card, card issuers screen for specific criteria, including your credit and payment history. Lenders often prescreen by requesting a soft inquiry to check credit and determine who qualifies.

You may receive a preapproval offer from card issuers that you already have an account with or from affiliated partners who are looking for ways to promote their credit card offerings. When you get a preapproval offer, it often includes a preview of the card’s credit limits, interest rates and special promotional offers.

Preapproval for business credit cards

The preapproval process allows businesses to gauge their likelihood of approval, which can save time and protect a businesses' credit scores from hard inquiries. However, preapproval offers for business credit cards are not as common as those for consumer cards.

The best chance of getting preapproved for a business credit card may be to have an established relationship with a financial institution. Businesses may be more likely to get a preapproval offer if they have a checking or savings account with the card issuer who may more easily gauge their credit worthiness.

Even if you receive a preapproval offer, that is only one step toward approval. You still need to apply for the card and go through the formal approval process.

Eligibility criteria for approval

Reviewing the eligibility requirements before applying for a card may help to determine if you meet them and are a qualified candidate for approval. Eligibility requirements vary by card and card issuer, but they can include:

• Meeting or exceeding business revenue thresholds
• Having a legal business structure
• Operating your business for a certain amount of time
• Meeting or exceeding a minimum credit score

By understanding and meeting the eligibility requirements, you may increase your approval odds.

Factors that may influence approval

There are several factors that can influence approval for a credit card, including:

• Credit score: Your credit score is one of the most important factors that a lender considers. Those with higher credit scores likely have a better chance of approval.
• Credit utilization ratio: Credit utilization ratio is the percentage of your available credit being used at any given time. A general rule of thumb is to keep your credit utilization ratio below 30 percent.  
• Existing debt: A card issuer may want to see how many existing debts you have as well as how much money you owe to debt obligations.
• Payment history: Lenders may want to see if you have a history of making payments on time. 

The business credit card application process

You can apply for a business credit card online or often in person at a bank. During the application process, the card issuer tries to get a full picture of your financial health. To do this, they will likely pull your credit and ask for the following information: 

• Business name, address and contact information
• Number of years in business
• Industry
• Number of employees
• Annual revenue
• Tax ID (EIN)
• Tax returns
• Personal information about the business owner such as name and Social Security number

After you submit your application and required documentation, the credit card issuer will review your application and credit history. If you’re approved, you may receive your new business credit card in the mail within 7–10 business days. If your application is denied, the issuer may send a letter explaining the reason for denial.

Choosing the right business credit card

Business credit cards may offer some advantages over personal credit cards, as they are often customized to meet the needs of business owners and may offer the ability to earn rewards on business-related purchases.  

When choosing the best business credit card, you may want to consider the following:

• Rewards structure: How can you earn rewards points and what rewards are available?
• Annual fee: Does the credit card have an annual fee? 
• Account management tool: Some business cards may easily integrate with booking systems or include tools that make it easier to categorize and review spending. 
• Card benefits: What benefits are offered by the card? Business credit cards can include purchase protections and travel perks that business owners may find beneficial. 
• Introductory offers: Some cards may include introductory offers, like bonus points or cash back, for new cardmembers. 

Before beginning the approval process with any card, it may be a good idea to thoroughly review the terms and conditions of the card. This may help you understand the potential fees, interest rates and penalty charges.

In summary

Getting preapproved for a business credit card may be less common than getting preapproved for a consumer card. However, reviewing the eligibility requirements of a card can help you determine how likely it is that you’ll receive approval. 

When you apply for a credit card, you may be asked to provide personal as well as business information. If approved, you can typically expect your card to arrive in the mail within 7-10 business days.