Business credit cards may appeal to business owners for many reasons. They help build business credit, provide opportunities for financing and help keep personal and business expenses separate. Many business credit cards require a credit score of “good" or higher, so if you have no or limited credit, you may be wondering if getting a business credit card is a possibility. Luckily, there are small business credit cards for bad credit available on the market — you just have to know what to look for.
Why do you need a business credit card?
Business credit cards can have benefits for businesses of all sizes. Whether you're a well-established titan of industry, a thriving small business or even a bustling startup, there are aspects of having a business credit card that would likely interest you.
- Separate finances: Having a credit card specifically for business expenses helps you keep track of your spending. It may also help you when tax season rolls around, as you'll have all your business transactions available under a single account.
- Additional tools: Many business credit cards offer access to some type of expense management system to help you stay organized. Some also provide additional protections, such as purchase protection, cell phone protection and extended warranties.
- Building credit: Just like you have a credit score, so does your business. Being a responsible business credit cardholder can help you grow and maintain your business' credit score. Having strong business credit may help you secure larger credit limits and lower interest rates in the future.
- Business growth: Business credit cards usually have higher credit limits than personal credit cards. Having access to these funds may allow your business to invest in equipment or training that could help your business' growth in the long run.
If you're worried about applying for credit cards for small businesses with bad or no credit, fear not. There are options out there for business owners who have limited credit or none at all.
Small business credit cards with no credit required
If your credit score is low or you don't have established credit, you may not be eligible for every business credit card. There are, however, cards that may be available to you.
- Secured credit cards: There are a handful of secured business credit cards on the market that could be an option for those with low or no credit. A secured credit card requires a deposit that will act as collateral to reduce risk to the lender. Your credit limit will generally be equal to what you can put down as a deposit but may rise over time with consistent on-time payments. A secured business credit card can also help you build your business credit. Note that Chase's business card range does not currently include a secured credit card.
- Corporate credit card: For more typically large, incorporated companies, corporate credit card may be a good option. Corporate credit cards differ from some other small business credit cards because the liability falls to the business entity, instead of the business owner. There are, however, some requirements for a corporate credit card that would exclude startups or very small businesses. This includes the age of business and revenue requirements.
- Traditional business credit cards: While not every small business credit card will consider approving someone with low or no credit, there are some that will. Do your research on different issuers' requirements and see if there is one that fits your credit score.
How to apply for a small business credit card with low credit
If you plan to apply for a small business credit card with bad credit or no credit, it's important to know your credit score. There are a few different websites that can provide you with that information so that you go into the application process informed.
While your credit score may be the biggest factor when choosing a small business credit card to apply for, it's still a good idea to have your preferred terms and features in mind. That way if you come across multiple cards that will accept your credit score, you can choose the one that's right for your business specifically.
Once you decide which card you think will be the right fit, there is some information you'll likely need for the application. This includes:
- Business name, address and phone number
- Employer identification number (EIN)
- Annual revenue
- Number of employees
- Years in business
- Type of business, including legal structure and industry
- Estimated monthly expenses
- Personal information, such as your social security number (SSN), birth date, address, annual income, etc.
Though options may be a little more limited when it comes to applying for small business credit cards with bad or no credit, there are cards such as corporate cards or secured business cards that may still be available to you. Be sure to do your research carefully so you can pick a card that's right for your individual business needs.