It's no secret that acquiring funding for your business can be extremely difficult. When you consider the role your personal and business credit play in the approval of your application its important to understand how to position yourself for approval. One of the most common reasons are denied for funding is insufficient business credit scores.
This article will cover how to build your business credit and how to get the most out of your business credit cards.
Using business credit cards can be seen as a foundation for future business loans, since business cards are one of the smartest was to establish a positive business credit history. Adding revolving account and trade-lines to your business credit is a sure way to get approved for higher limits and better terms in the future.
Here are some of the advantages of using business credit cards for your business:
1. Quick Approval
Compared to traditional business financing, business credit cards allow for a fast turn around and business owners can receive there cards in as little as 48 hours after approval. Most business cards are approved on the basis of personal credit, to learn more about how to get approved for business credit cards contact a Trustart Lending Specialist.
Business credit cards will reward you for using them, you are able to tailor these reward programs based on the needs of your business. If you travel alot perhaps a plan that rewards you with airline miles would be a great fit for your business.
3. Higher Credit Limits
Business expenses are often times much higher compared to a consumer credit cards because of this lending institutions will often issue higher limits compared to the current personal credit lines you hold. This allows you to keep cash on had and finance your business needs.
4. Staying Organized
Your tax professionals worst nightmare is mixing business expenses with personal ones. A business credit card will allow you to meticulously keep track and separate your expenses. Most credit cards even offer annual spending reports that keep your books clean and organized.
5. Less Personal Risk
Business credit cards report to your business EIN number and this allows you to separate the utilization and debt to income off of your personal credit report. It is very common for business owners to finance business expenses on personal credit cards which ultimately drastically drop your credit score and leave you with missed opportunities.
Keeping business credit cards as an emergency funding solution for short term unexpected expenses is a great way to keep your business operating efficiently. With industries and regulations constantly changing you never know when the winter season may hit your business and you should be adequately prepared for any changes in your industry.