Why Its Important To Have A Business Credit Card

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Why your business needs a business credit card

Updated 5/15/2020

As many businesses start to reopen after being closed for 2 months due to Covid-10.  Many business owners are facing the fact that the banks have tightened their approval process.

business credit card

But they are still financing businesses.

They just want those business to be able to show the following;

Financially stable BEFORE covid 19.

Usually the banks ask us to provide 3 months bank statements.  Now they want 6 months.  That way a business has the opportunity to show they were stable BEFORE the closure.

Good personal credit

Having good personal credit is more important than ever. No one knows where the economy will go in the next few months.

The banks feel safer working with business owners with good personal credit.

What if you don’t have good personal credit?

You can provide additional security.  The banks will accept it in the form of equipment or real estate.  They will still want 6 months bank statements to see how your business was doing before the shut down.  But this form of financing is a lot easier to qualify for than a traditional bank loan.  For more information on secured business loans click here.

 

hy its a good idea to start building business credit 

Business owners that took the time to build their business credit though, have a completely separate way of obtaining financing for their business. Having a business credit card isn’t just for big businesses.

A business credit card is useful for business owners at all stages of their development!

There are many reasons why even a home based business needs to get a business credit card.

  1. You MUST separate your personal finances with your business finances. Otherwise, your tax season will be a nightmare and you may not be able to get the deductions
  2. From the SBA.Gov site: “46% of all small businesses use personal credit cards. Many small businesses fail to separate business and personal expenses, according to research conducted by MasterCard®.”
  3. According to the NSBA Small Business Access to Capital Study, 20% of small business loans are denied due to either a bad business credit score or worse.  No business credit built.
  4. Most lenders like to see a minimum of 3 years business credit history when you apply for a business loan.   Otherwise, they will ONLY consider financing the business using your personal credit
  5. Perks.  Once you start building your credit you become eligible for better business credit cards.  Many have rewards or and perks like insurance.  When we opened our first office in Las Vegas, less than a month later our office was robbed.  We stupidly didn’t have business insurance on that location yet. Since all our equipment had always been covered in the past by my homeowner’s insurance.What I found out was, everything that I had purchased with our American Express Business card was covered by THEIR insurance up to about $5,000!  I got almost all our money back.   I was SOOO happy I used my business credit card for the purchases!

 

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Elizabeth Roberts

Elizabeth Roberts

Liz Roberts and her team are continuously providing information to people who are ready to repair their credit and improve their credit score. Also NewHorizon.org team strives to empower the homebased and small business owners by bringing information that can help them to manage and grow their businesses. Let our 24+ years of business finance experience help you to get the financing you need! CONTACT US if need financing for your business.

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NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

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NHBS Inc © 2022

NewHorizon.org is an independent, advertising supported website. The owner of the site may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. NewHorizon.org has not reviewed all available credit card offers in the marketplace.

Privacy Policy Terms of Use

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