How to Apply for Business Credit Card

How to Apply for Business Credit Card

All new business owners always want to know that how to Apply for Business Credit Card. Applying for a business credit card is easier than it sounds. Here is how to apply for one, whether you have a corporation or a tiny home business.

A business credit card is a great way to get extra rewards and perks. But not all credit cards are created as equal. Read on for everything to know about how to Apply for a Business Credit Card.

WHO CAN Apply for Business Credit Card?

Business cards aren’t just for corporations. You can apply for a business card even if you’re running a one-man show and have no office, which is called small business credit cards.

You may be surprised by what could be considered a business. Here are just some examples:

  • If you’re a freelance web designer.
  • You may have an Etsy shop.
  • You might sell books on eBay.
  • If you drive Uber in your spare time.
  • Or you tutor students.
  • Even if you sell cookies at the farmer’s market.

Basically, if you do anything for profit, it can be considered a small business.

In fact, you don’t even have to be already making income to apply for a business credit card. You just need to have a reasonable intention to make money and have business expenses (such as buying materials for your Etsy shop).

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Steps to Apply for a Business Credit Card

If you’re interested to know how to get a business credit card, the first step is to compare a range of options to find one that is convenient and affordable for your business. Once you have found one, you can usually apply for business credit card online. Before you Apply for Business Credit Card, you’ll need to make sure that you meet the following eligibility requirements and have organized the necessary documents to complete the application:

1. Eligibility requirements

  • Much like personal credit cards, cardholders will need to be over 18 and permanent residents of the country where you are applying for a Business Credit Card like the USA, the UK, Canada, Australia, Europe, etc. Some lenders will also stipulate a minimum annual turnover. While cards are available for pretty much any size and kind of company, lenders may have specific products for specific categories of businesses (for example sole traders).

2. Necessary documents and information:-

The other details you will be asked to provide when you apply for business credit card, may vary depending on the card, but generally, you will need to provide:

  • Contact details. Contact details for you and/or your business.
  • Proof of identification. A valid form of identification, such as your driver’s license or passport.
  • Financial information. You may need to provide information about your business income and/or revenue as well as any assets and liabilities, including investments, debts and regular expenses.
  • Additional Cardholders. If you wish to manage employee spending under the one account, you’ll also need to provide details of all cardholders.
  • Accountant’s information. Information on the person or organization that manages your company books and financial records.
  • Other documents. Supporting documentation such as tax statements and investor reports may also be required.

3. The business’ legal name

  • This is the name you use to do business. It’s what will show up on your Business Credit Cards if you’re approved.
  • If you have a corporation or an LLC, enter the business name that you registered with your state government.
  • If you’re a freelancer or sole proprietor, just use your legal name on this line.

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4. Your tax identification number

  • You’ll need a tax identification number to process your application when you Apply for Business Credit Card.
  • Incorporated businesses and partnerships enter their federal Employer Identification Number. This is a nine-digit number issued by the IRS for tax reporting purposes.
  • If you’re a freelancer, you’d enter your Social Security number on this line (unless you have an IRS-issued Employer Identification Number).

4. The business type/business structure

  • This is the kind of business you’re operating. If you’re an LLC, you’d choose partnership or corporation, based on how it’s set up. If you are a freelancer, you would usually put down sole proprietorship.

5. The industry type/nature of the business

  • Credit card companies also want to know what kind of business you’re running. You’ll have a list of industries to choose from. Just select the one that fits best, even if it isn’t quite the exact label.

6. Your role in the business

  • Spell out what you do. For example, you can say you’re the owner, president, or general manager.

7. Business address and phone number

  • You’ll need to fill in the contact information for your business. If you run your business from home, just use your home address here.

8. How long you’ve been in business

  • Enter the number of years you’ve been in business. If you’re still in the early startup phase, just enter “0” in this box.

9. The number of employees

  • Enter the number of employees you have, if any. If it’s just you, enter “1” for yourself.

10. Annual business revenue

  • You have to let the credit card company in on how much revenue your business is bringing in each year. If your business is new and you haven’t made a buck yet, it’s fine to put “0.”

11. Estimated monthly spend

  • This just means your most accurate guess of what you think you’ll charge to the card each month. Not all business card applications ask for this, but you should be ready with an answer if it comes up. Make sure this is what you will charge for business expenses, not personal.

Aside from your business information, you’ll need to connect the dots on your own personal details when you Apply for Business Credit Card. That means filling in:

  • Your full Name.
  • Address, phone number, email, and other contact details.
  • Social Security number.
  • Date of Birth.
  • Mother’s maiden name.
  • Household income.

If you’re approved, you could have your card in as few as 5-10 business days (depending on the account and issuer). You can then activate the card, and start using it for your business.

With expense tracking features, additional cards, interest-free periods and reward options, credit cards can be a convenient option for both big and small businesses. Now that you know more about them, you can compare your options, but you should also learn about the Pros and cons of Business Credit Cards before you Apply for Business Credit Card.

Pros and cons of Business Credit Cards

  • Pros of Business Credit Cards

    • Potential tax deductions for claiming a business credit card or charge card annual fee
    • Simplified book-keeping/accounting process
    • Expense and cash flow management
    • Liability options
    • Security features
    • Customizable credit limits
    • Builds business credit
    • Additional cardholders
    • Complimentary extras specifically designed for businesses
    • Available and issued as either Visa, Mastercard or American Express card
  • Cons of Business Credit Cards

    • Require a good credit record and business turnover
    • Potentially expensive fees
    • Interest charges if you carry a balance
    • Can be hard to keep track of employee spending if you’re a small business
    • Limits spending on business expenses only
    • Purchases are not protected by Section 75 of the Consumer Credit Act, in contrast to purchases made on a personal credit card

Conclusion:-

I hope you now have completely understood the process of How to Apply for Business Credit Card, but if you still face any problem regarding this, you can always ask us here in the comments section below.

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