Woman using a business credit card

Understanding Business Credit Card Requirements

5 min read • Oct 02, 2019 • Grant Olsen

If you’re a small business owner, it’s important to be familiar with business credit card requirements. A business credit card can be a great option for your financing needs. Whether you choose to go with a credit card or a different form of debt financing, you should have enough information to help you make an educated decision.

Why Business Credit Cards Are So Popular

Take a moment to think about some of the key obstacles an entrepreneur might face while trying to get their business off the ground. They might lack enough business tenure to easily qualify for a traditional loan. They might be intimidated by the process of acquiring a loan. Or perhaps they just want financing that’s readily available and easy to use.

A business credit card checks all these boxes. Because it’s so similar to a personal credit card, you can use personal credit to guarantee it, the application is streamlined, and most people will already know how to use it for purchases.

“A business credit card can be much more than a convenient way to pay for purchases,” says Forbes. “These cards can also provide lucrative rewards, superior fraud protection, and smooth out cash flow. According to the Federal Reserve’s 2019 Small Business Credit Survey, 52% of firms with 1 to 499 employees use credit cards on a regular basis.”

Business credit cards are designed to give you access to working capital without the complexity associated with some loan products. You’ll have cash at your fingertips and, to make matters better, you’ll earn rewards each time you use it. Common reward options include cash, travel miles, and gift cards. You just choose your favorite and watch the perks pile up as you go about your day-to-day business.

Paying off your business credit card is also simple. You make monthly payments, like you would with your personal credit card. The payment portal will probably be similar to what you currently use for your personal card. And every time you make a payment, you’ll be building your credit.

What a Business Credit Card Looks Like

Just like personal credit cards, business cards can be used for a wide array of purposes. As long as the purchase is related to your small business, go for it. This flexibility can be a welcome alternative to the laser-focused financing associated with products such as startup loans, business acquisition loans, and equipment financing.

Your business card can connect you with up to $500,000, and interest rates range from 8–24%. Once you’re approved, the money will become available relatively fast. In some cases, it only takes 6–7 days before you can begin using your card.

How to Qualify for a Business Credit Card

When approached for financing, lenders look at the borrower’s financial history before making any decisions. If you’re in the process of launching or developing your business, there clearly won’t be much tenure for a lender to consider. This situation is where business credit cards can be most valuable, as they provide more avenues for qualifying. 

“For small businesses struggling to find funding, borrowing against a credit card can be an attractive—if not the only—option,” explains Entrepreneur. “Plunging further into credit card debt is a scary proposition, but for many the outcome has been rewarding. If you feel using a credit card to fund all or part of your business is the best option for you, be sure to read the fine print before responding to your next credit card offer in the mail. Understanding the risks before you accept the offer can save you a lot of financial pain in the future.”

If you have a personal credit score at or above 680, you should be a prime candidate for a business card. In order for your business to meet the definition on the application, you simply need to provide goods or services for profit. So whether you own a brick-and-mortar on Main Street, run an Etsy shop from your garage, write freelance articles from your living room, or host an Airbnb in Hawaii, you can qualify for one of the many cards available in today’s marketplace.

While it’s a requirement for your business to be for-profit, you don’t actually have to be profiting at the moment to meet the criteria. If you have a killer business idea and have already taken the step of naming your future business, you can still qualify even if you haven’t yet earned a single penny. Or if you own a construction company and need to purchase materials before you complete a job and get paid, a business credit card is an excellent way to make pre-profit purchases. Not only is it an easy method for funding your operations, but you’ll earn rewards from those required purchases.

Business revenue is something that will definitely come up on the small business credit card application. If your business is already bringing in money, that’s great. Accurately report the revenue and income numbers on the form, and you’ll be taking a big step toward approval from the credit card company.

For businesses still in the infancy stage, don’t be afraid to disclose that you aren’t currently making any money. You’ll have the opportunity to provide an estimate of what you plan to make in the future. While telling the lender that you aren’t making money could potentially decrease your chances for approval, your honesty won’t go unnoticed. Banks appreciate when applicants show authenticity, and they’re often willing to provide a business card as a way for you to build your business up to where you want it to be.

As with other forms of small business lending, credit card companies have every reason to root for your business. When your operations are thriving, you’ll spend more on the card and produce more profits for them. So they’re happy to be your partners and will do everything they can to make it worth your while to use their card.


Grant Olsen

Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on FitSmallBusiness.com and ModernHealthcare.com. Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.