Overview
If you want to start a small or new business,
then you need funds for setting up and running the business. It is the
reason why many companies seek out business funding options for their
capital investment, which will help them start and run the business
successfully. There are many different options available today, however,
business credit cards seem to be one of the most popular forms for
funding small and new businesses.
How It Works
When it comes to business credit cards, they work much in the same
way as personal credit cards. That's why some of the companies plan to
use personal credit cards for their business expenses. However, business
credit cards provide much more flexibility for businesses, especially
when it comes to bookkeeping. It can often be quite hard for people who
use their personal credit cards for business expenses, as they cannot
keep their personal and business expenses separate, which may lead to
serious confusions at some point in time. Business credit cards allow
you to pay all your business expenditures, which in turn helps you keep
track of your business expenses separately, making your bookkeeping
effortless and easy.
Benefits
When using business credit cards for bill payments, companies can
track the business expenses with the help of the itemized and
categorized year end statement summary provided by the credit card
companies. One of the biggest benefits is the ability to use your
business credit cards as leverage on other forms of funding. Many
businesses will utilize the credit that they build for themselves with
business credit cards in order to use it as leverage for getting other
business loans. A wide range of reward and discount programs are
provided for the companies, if they maintain a good credit score. Some
credit card companies also offer separate cards to employees with preset
limits and the expenses can be monitored in separate statements.
Cost/Pricing
Most of the major credit card companies do not ask for an annual fee.
Some business credit cards offer a 21-day grace period before you can
make payment on your purchases. There are many small business credit
cards whose interest rates are lower than those of personal cards.
Business credit cards for small business also reward higher bonus and
incentives for entrepreneurs.
Timing
The time to apply for business credit card is based on your business
status and your eligibility. If your business is already operating, you
might have a better chance of getting business credit cards. However,
there are also opportunities for new businesses to get credit cards and
use them to meet the initial start up costs.
Companies/Industries
Many companies in the financial industry offer business credit cards.
However, one of the first things you should do is to contact someone
through your bank to get to know the different kinds of opportunities
available for getting business credit cards. It is always much easier to
become eligible through your current financial institution, with whom
you have accounts and other transactions, as they already know your
situation and are familiar with you and possibly your business. It is
the best option if you are planning to start a new business. It also
reduces the time taken for you to explore the various options available.
