Financing a business can be a challenge, especially if you only have limited funds in your account. Most entrepreneurs seek out business loans or bank loans in order to finance their businesses. Aside from traditional business loans, what other options do you have? Where can you get additional assistance for your business financing purposes? In this article, we’ll be talking about business credit cards and how they can help in shouldering your expenses and in building your business credit.
Small Business Credit Cards – Wonderful Financing Tools
You don’t have to be a big company to be qualify. Nowadays, companies have issued cards that are especially designed to meet the needs of small business entrepreneurs or home based enterprisers. Whether you own a small or big business, you can surely find a card that suits your needs.
Can you apply for a card even if you’ve just started your business? The answer is yes. Even if you haven’t yet established a separate credit history for your company, companies will still consider your application by taking a look at your personal credit. If you have a good to excellent credit score, you can have an easier time getting approved for small business credit cards with the best deals.
Nevertheless, if your personal credit score isn’t as impressive as you hoped it would be, you can still get approved for a secured business credit card. Secured cards are particularly designed for entrepreneurs who have a problem with bad credit. This card is secured by submitting a certain amount of deposit to the card holder’s account. In fact, you can use it to start building your credit.
How can business credit cards help with your financing demands? First, it frees up your available cash flow so you can save them for your basic expenses. Having it gives you the assurance that you have a reliable financial resource in case of unexpected or emergency expenses. For start up businesses, it is a great way to invest on the equipment you need without paying for them in cash.
Another advantage is you can track your spending more conveniently. Aside from the monthly statements of account sent by your card issuer, you can also use the quarterly and yearly account summaries as references to your bookkeeping and accounting tasks. Many business credit cards provide downloadable account summaries which you can use along with your accounting software. These references will prove to be invaluable especially in filing your business taxes. By checking out the exact items you’ve purchases, you can easily determine which ones can be written off from your taxes.
As we’ve said, one of the most important uses of business credit cards is helping you build credit. How can you build a strong business credit with the use of your credit card? By staying within your credit limit, using your credit card exclusively for business purposes, paying off your balances in full each month and by promptly submitting your payments.