Mark Carolin

Posts Tagged ‘Business Owner’

Regardless of the type of business you own or how long you have been in operations, getting a real credit card for business is a must. True, you cannot finance an entire business using only business credit cards, but they can be wonderful back-up to cover for monthly expenses or unexpected needs, particularly when cash flow is tight. Today, let’s discuss how entrepreneurs can use cards to their benefit.

Using Cards for Business Expenses

Some entrepreneurs may insist that there is no need to apply for a card since they can also use their personal cards to pay for business expenses. Indeed, you can use your personal card for any purpose you want, but business owners are completely discouraged from mixing personal and business finances.

As your company grows and expenses increase, it will be very difficult to make financial decisions if your personal and business accounts are merged. On the contrary, having a separate business account can help the business owner keep track of his/her company’s budget and avoid unnecessary spending. In fact, a business credit card holder can use card statements and annual account summary reports as accurate references when performing accounting tasks or when filing business taxes.

Business credit cards are also the best tools in building corporate credit history. As you use your card to pay for your company’s expenses and pay off balances on time, you are building up your Paydex Score at the same time. Just be sure to choose a credit card company that offers credit reporting to the business credit bureau such as Dun & Bradstreet and Experian Business.

Hence, in case you may need to apply for a business loan, getting approved can be much less complicated. And since it’s easier to apply for a credit card than a business loan, new entrepreneurs can establish credit history using a card to increase chances of getting a loan approval. After a year or two of consistent payments, you will surely be able to present an impressive business credit history to potential lenders.

Employees and Supplementary Cards

Supplementary credit cards are cards that are linked to the primary business credit cardholder’s account. These cards can distributed to selected employees so they can simply charge small business expenses without having to go through the long process of requesting for cash and waiting for the funds to be released.

All purchases made using the supplementary or employee card will be reflected to the business credit card owner’s account. This way, employee spending can be closely monitored and unofficial transactions can be avoided.

Smart Management of Your Card Account

As a personal credit cardholder, you may probably well know that timely payment is crucial. In the same way, business credit card balances should be paid on time as well. Keep in mind that in order to build and maintain a good business credit history, you need to make sure that all your accounts are free from late payments or negative remarks.

If you think that business credit card and corporate credit cards are the same, let this article help you compare the differences between the two. If you own a small business, you’ll be glad to know that small business credit cards are especially meant to serve small business entrepreneurs like you.

Finance companies realize the potential of the small business clients and for this reason, they have introduced these cards in the market. Unlike the corporate one, applying for these cards is not at all complicated. In fact, even newly started business can get approved for these cards using the business owner’s personal credit history. But what if your personal credit score isn’t as impressive as you want it to be?

Secured business credit are designed especially for business owners with bad credit. To make up for your bad credit, a collateral or “security” would be required and this can be your home or a property that you own. Both an unsecured and a secured one are great tools in establishing a separate credit for your company.

What about corporate credit cards? As its name implies, these cards are exclusively offered to large business owners or corporations. If you take a look at these cards advertised today, all of these are for small businesses. Credit cards for corporations are actually not advertised at all.

Unlike for a small business where you can apply online, these cards involve a more complicated procedure. How can a large business obtain one? Before the application is submitted, the business owner along with his partners will set up a meeting with the card’s representative. In this meeting, the specific needs of the company would be discussed as well as the requirements they need to submit for approval.

Since a corporation is often a partnership and involves a huge number of employees, one can expect that it also has complex needs. The credit company would see to it that these specific needs are properly addressed and that these cards will duly serve its purpose.

Clearly, no matter what type of business you own- whether it may be a small business, homebased business, medium-sized business or a corporation- there is a card that is designed to suit your needs. If you’re a small business entrepreneur, there’s no need to be afraid that a business credit card is just made for businesses with incredibly huge expenses. Even if you only have a few business expenses, getting a business credit card is worth the deal.