Tag: Business

How to Setup a Business the Right Way to Start Building Business Credit

How to Setup a Business the Best Way for Building Business Credit

Are you looking to setup a business? Your business can be much more likely to get funding from the jump – if you set it up the right way. Here’s how.

Setup a Business the Right Way from the Start

Setting up a business is a task that can take a while. There are a lot of moving parts. It’s a lot more than just hanging out a shingle. And the way your business is set up can directly affect the ability of your business to succeed.

Fundability

What is it? Fundability is as a business’s ability to get funding. You can make it harder or easier for your business to get money. A lot of the power is in your hands. Yes, you have some control over this.

Setup a Business For Fundability

A business starts with no credit profile. Therefore, what’s on an application is all that’s reviewed for approvals. So your application must be very strong. Nearly half of all companies fail in their first 5 years, and about 2/3 in the first ten. As a result, new businesses don’t seem fundable to lenders. You can change that by building for fundability from the very start.

Industry and Risk

An early step to fundability is the industry your business is in. Some industries are considered to be riskier than others. When it comes to traditional funding sources, added risk can mean stricter underwriting guidelines or even no funding at all

Risky industries tend to be places where chances of personal injury or property damage are high, or a lot of cash is used, or the revenue stream is unstable. Weapons manufacturing, pawn shops, and the political campaigns all fill the bill.

Business Name

Check with your Secretary of State – they might require that a business name be unique. While checking your name with your Secretary of State, also ensure they have all the necessary information for your company. Make sure that you are in good standing with them, and that your entity is active. You will have to file annual reports and pay a fee each year to stay active.

Keep the name of a high-risk or restricted industry out of your business name. There is nothing underhanded about this – it is above board and honest. And it can help prevent an automatic or nearly automatic denial from a lender. A common reason for loan and credit card application denials is the lender can’t easily locate a business online. The business name on your application should be the exact same as what’s listed online and with your Secretary of State.

Business Names and DBA Filings

A full business name should include any recorded DBA filing in use. But consider a DBA only a short stop on the way to incorporating. Make sure the business name is exactly the same on corporation papers, licenses, utility statements, and bank statements. Also make sure the business name and all other information is the same on as many online listings you can find.

Business Address

A business address must be a real brick and mortar building. It must be deliverable physical address. This can never be a UPS box or a PO Box. Some lenders will not approve and fund unless you meet this criterion. Lenders check with USPS and places like Google Maps to see if you’re using a home address. If you are, you may get a decline.

In particular, retail establishments like clothing boutiques need their own address. If your business is a retail establishment like this, do not use a home address on your application! Not even if your company is just you . You can use a virtual address. We like Regus, Davinci, and Alliance Virtual Offices. But keep in mind that there are credit providers that will not accept virtual addresses.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Setup a Business Entity and EIN

You can get a free EIN for your business at IRS.gov. Just like you have a Social Security Number, your business has an EIN. Your EIN is used to open a bank account and to build a business credit profile. To truly separate business credit from personal credit your business must be a separate legal entity, not a sole proprietor or partnership. Only incorporating creates a new, separate entity.

A corporation or LLC business entity gives you more credibility in many cases. These entities by default reduce your personal liability. Other entities don’t. File this with the Secretary of State for your state. Make sure your entity is set up in the same state as your business address. Verify all listings show the same name, address, phone numbers, etc. as in state and other records. Also make sure your address with the IRS matches everywhere else.

Business Licenses

Contact State, County, and City Government offices to see if there are any required licenses and permits to operate your type of business. Licensing requirements differ. Differences depend on state, town, and industry. Always make sure you have the proper licensing for your corporation.

Do not apply for funding if you are unlicensed. Verify that all main agencies (State, IRS, Bank, and 411 national directory) have your business listed the same way and with your exact legal name. And make sure the address on your licenses is the same as all other documents. Being licensed also builds credibility in your business, and that can help you get more customers.

SIC and NAICS Codes

The IRS website is also where you choose SIC and NAICS codes. Industries are classified by 2 kinds of codes. They are SIC (Standard Industrial Classification) and NAICS (North American Industry Classification System). You chose these codes. Be honest when you choose your codes.

There’s no reason to choose the riskiest code if a less risky one might apply. The NAICS system is phasing out the SIC system. But that’s taking years.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Business Phone and 411 Listing

Toll-free phone numbers are best. Lenders see them as a sign of business credibility. Even if you’re a single owner with a home-based business, a toll-free number provides the perception that you are an even bigger company. It’s very easy and inexpensive to set up a virtual local phone number or a toll free 800 number. A cell or home phone number as your main business line could get you flagged as un-established – but VOIP is okay.

If you don’t want customers and prospects calling you all day long, do not use a personal cell phone or residential phone as the business phone number. It also helps with fundability if you have a dedicated business phone number. Your phone number must be listed with 411 for most credit issuers and lenders to approve you. Check for your record to see if you’re listed. Make sure your information is accurate. No record? Then use ListYourself.net to get a listing.

Web Domain and Professional Website

Credit providers will research your corporation on the internet. It is best if they learned everything directly from your corporate website. Not having a company website can hurt your chances of getting corporate credit. You need it to be a professional website.

Use places like TemplateMonster.com and Upwork.com and get a site up cheap and fast. Get a professional logo from Fiverr. Buy web hosting from a company like GoDaddy. Do not use Weebly or Wix. This is because you want it to be your domain, not domain.wix.com. Your domain should be your business name, if possible

Web Domain and Professional Website: Details

You need a company email address for your business. This email must be on the same domain as your website. Use a professional email address such as yourname@yoursite.com. It often comes with a website domain provider such as GoDaddy. This is not just professional; it also greatly helps your chances of getting approval from a credit provider. Do not use Yahoo, AOL, Gmail, Hotmail, or similar kinds of email.

Business Bank Account in the Business’s Name

You must have a bank account devoted strictly to your business. The IRS does not want you commingling funds. Make accounting easier and reduce the risk of audit at tax time. Keep personal and business funds separate. The simplest way to do this is with a separate account.

Your business banking history is vital to your future success of being able to secure larger business loans. The date you open your business bank account is the day that lenders consider your business to have started. So if you incorporated your business 10 years ago, but just opened the business bank account yesterday, then your business started yesterday. The longer your business banking history, the better your borrowing potential is.

Business Bank Accounts and Business Financials

Look to the future. It’s bank (and other) loans, and other kinds of funding. Set your business up for bank loan approval success. Keep a balance of $10,000 or more, for at least three months. This gives you a Low 5 Bank Rating.

With a Low 5 Bank Rating, most conventional banks see your corporation as fundable. Less than $10,000 in your account gives you lower than a Low 5 bank rating. If you don’t have a Low 5, you can still get corporate credit and alternative loans, but you would not be able to get a conventional loan. Bank ratings measure how responsible the account owner is with funds.

Learn more here and get started with building business credit with your company’s EIN and not your SSN.

Setup a Business Merchant Account

Getting a business merchant account is a smart way to help out your business. Now your business will be able to accept credit and debit cards. Studies show that customers will spend more if they can pay by card. This also increases your finance options. It’s generally more secure, too.

Get Set Up With the Business Credit Reporting Agencies

Go to D&B’s website and look for your business. Can’t find it? Then get a free D-U-N-S number. A D-U-N-S number plus payment experiences leads to a PAYDEX score. Once you are in D&B’s system, search Experian and Equifax’s sites for your business. Another ID number is the BIN (Business Identification Number) number from Experian. Experian’s BizSource assigns a BIN.

Your Business Credit History

You  can get the most favorable funding by paying all bills on time. This will get your business:

  • A PAYDEX score of 80
  • Equifax Credit Risk Score of 90 or better
  • And a good FICO SBSS score, which is driven (in part) by on-time payments and business credit history
  • For Experian, historical behavior (payment history) is 5-10% of the total score

Keeping Congruent Business Information

Keep all records consistent! CRAs and creditors are going to look at everything. So it had better match, or you’ll get a denial due to fraud. That’s how lenders interpret inconsistencies.

Your business name, address, and phone number – all your business information – must look the same in these places and more:

  • IRS and Secretary of State records
  • Business records with Dun & Bradstreet, Equifax, and Experian
  • Incorporation documents
  • All online listings
  • Copy and paste this information; do not chance it with retyping

Personal Financials and Personal Credit History

Let’s not forget about your personal credit. Personal credit quality is often helpful for getting funding. So if your personal credit is not in order, get it straightened out and improve it. This generally means paying your bills on time and curbing your usage. For a business loan at a conventional bank you need good personal, business, and bank credit. While you want to build good business credit, having good personal credit can get you started.

Good personal credit will open doors, and it will open them earlier. Do you eventually want to try for an SBA loan? Then you will need to have good personal credit.

Setup a Business the Right Way: Takeaways

The way your business is set up can directly affect whether your business survives. Details such as business name, address, phone number, and email address all play a part. When you setup a business smartly, you can also help assure prospects that your business is on the up and up. It also means getting set up with D&B and other business CRAs, so you can start building business credit.

The post How to Setup a Business the Right Way to Start Building Business Credit appeared first on Credit Suite.

Why and How to Use an LLC – is it a Good Choice for YOUR Business?

How to Use an LLC for Setting Up a Business

One piece off setting up a business, beyond deciding on a name or buying web hosting, is deciding on the business entity. The business entity you choose will affect your business in numerous ways. If you want to know how to use an LLC, then you’ve got to know about business entities.

Why Business Entities Matter

Your business entity will determine the following with reference to your business:

  • Taxes
  • Legal liability
  • Costs and shares

LLCs

LLC stands for “limited liability company”. According to Nolo.com:

“An LLC is one type of legal entity that can be formed to own and operate a business. LLCs are very popular because they provide the same limited liability as a corporation, but are easier and cheaper to form and run.”

It “is a popular business structure combining both the liability protection of a corporation and pass-through taxation of a partnership. One advantage of an LLC is the flexibility it offers in terms of management and ownership structure.”

LLCs vs. Corporations vs. Partnerships

In order to best review what an LLC is, and how it can be helpful to your business, it pays to explain what partnerships and corporations are, including where they converge and where they differ from LLCs. We’ll also look at sole proprietorships.

Business Entities and the IRS

The IRS recognizes these business entities:

  • Sole proprietorship
  • Partnership
  • C-Corporation
  • S-Corporation

But an LLC is not considered a separate entity by the IRS. As a result, the IRS will follow certain rules depending on the size of an LLC, when it comes to deciding whether to treat it more like a partnership, or a corporation, or a sole proprietorship.

Business Entity Definitions

Let’s look at what the various business entities are.

Sole Proprietors and Partnerships

Sole proprietors – per the SBA, this type of structure “can be a good choice for low-risk businesses and owners who want to test their business idea before forming a more formal business.”

There are Limited Partnerships and Limited Liability Partnerships. Limited partnerships have only one general partner with unlimited liability. All other partners have limited liability.

Limited Partnerships and Limited Liability Partnerships

With limited partnerships, partners with limited liability also tend to have limited control over the company. The general partner (the partner without limited liability) must pay self-employment taxes. Limited liability partnerships work a lot like limited partnerships. But they give limited liability to every owner. An LLP protects each partner from debts against the partnership. Plus, partners will not be responsible for the actions of other partners.

C Corporations

C Corporations have a completely independent life separate from their shareholders. If a shareholder leaves the company or sells his or her shares, the C corporation can continue doing business relatively undisturbed. C corporations have an advantage when it comes to raising capital, because they can raise funds through the sale of stock. This can also be a benefit in attracting employees.

C corporations can be a good choice, for medium- or higher-risk businesses.

They can be good for businesses that need to raise money. And they can be good for businesses that plan to go public or eventually be sold. Incorporating (whether a C corporation or an S corporation) is also how to truly build business credit that’s separate from personal.

S Corporations

S Corporations are also called Subchapter S Corporations. An S Corporation is a special type of corporation. It is designed to avoid the double taxation drawback of regular C corps. S corps allow profits, and some losses, to be passed through directly to owners’ personal income, without ever being subject to corporate tax rates. S corporations are subject to certain rules, such as they can only have 100 or fewer shareholders.

Get our business credit building checklist and build business credit the fast and easy way.

How to Use an LLC and Other Business Entities When it Comes to Legal Liability

Let’s take a look at how legal liability differs among various business entities.

Sole Proprietors

With a sole proprietorship, there are no limits to personal liability. As a result, if the sole proprietorship did it, then so did its one owner. This includes all debts and obligations, and any risks from the actions of employees.

Partnerships

In partnership situations, partners retain full, shared liability. Therefore, partners are not only liable for their own actions, but they are also liable for any business debts and decisions made by the other partners. In addition, all of the partners’ personal assets can be seized to satisfy a partnership’s debt. Limited liability partnerships are an effort to address some of these downsides, like limiting a partner’s liability to just the money he or so put into the business.

C Corporations

Within a C corporation, shareholders’ personal assets get protection. Shareholders can usually just be held accountable for their investment in the stock of the company. But if an employee commits fraud or a felony under the corporation’s direction, then the corporate ‘veil’ can be ‘pierced’. If this happens, then personal assets can be on the line.

S Corporations and LLCs

An S corporation shareholder’s personal assets, like personal bank accounts, cannot be seized for the purpose of satisfying any business liabilities. Owners of an LLC are called ‘members’, as opposed to the owners of corporations, which are called ‘shareholders’. In an LLC, the LLC members get protection from personal liability for the business decisions or actions of the LLC. If the LLC incurs debt or is sued, the members’ personal assets are often exempt. But not always, hence the term ‘limited liability’.

Get our business credit building checklist and build business credit the fast and easy way.

How to Use an LLC for Distributing Costs and Shares

How do the distributions of costs and shares differ?

Sole Proprietorships, Partnerships, and LLCs

In a sole proprietorship, the owner is the company. If it makes money, so does the owner (and their share is 100%). In partnership situations, partner shares vary, and they should be clearly spelled out in the partnership agreement. An LLC works as another type of corporation. The only real difference is liability rather than shares and costs, so it works like other corporations.

Corporations (Both Types)

A corporation is run by its board of directors. These are usually the owners. Ownership stakes are defined by what percentage of stock everyone owns. If one person has a controlling interest (over 50% of the stock), then their decisions will generally overrule everyone else’s.

If the shareholders have smaller stakes in the corporation, sometimes shareholders will band together to influence decisions or even kick out board members. Profits are generally distributed per share percentages. But board members can take a salary. In an S Corporation, a shareholder working for the company must pay him or herself reasonable compensation. The shareholder has to get fair market value. Otherwise, the IRS may reclassify any additional corporate earnings as wages.

Taxes

How does taxation differ?

Sole Proprietors and Partnerships

How to Use an LLC Credit SuiteSole proprietors are the same as their owners, the owner pays taxes on the sole proprietorship’s profits. A partnership does not have to pay income tax. Instead, the business will pass through its profits or losses straight to the partners. Then the partners will include their respective share of the partnership’s income or loss on their personal tax returns.

C Corporations

C Corporations pay state and federal taxes, they sometimes also pay local taxes. This will include paying income taxes on profits. It is the opposite of partnerships and sole proprietorships.

A corporation can end up paying taxes twice, first when it makes a profit, and the second time when dividends go to the shareholders. This is the case even if there is just one shareholder

S Corporations

Only the wages of any S corporation shareholder who is also an employee are subject to employment tax. Any remaining income is payment to the owner as a distribution. Distributions are taxed at a lower rate, if at all.

Per the IRS, “Generally, an S corporation is exempt from federal income tax other than tax on certain capital gains and passive income. It is treated in the same way as a partnership, in that generally taxes are not paid at the corporate level.”

How to Use an LLC When it Comes to Taxes

An LLC is not a separate entity as per the Internal Revenue Service. As a result, it is not taxed directly. Instead, the members pay individual taxes. Members of an LLC have to pay an employment tax on the entire net income of the business.

Get our business credit building checklist and build business credit the fast and easy way.

How to Use an LLC: Upsides

LLC members get protection from personal liability for the LLC’s business decisions or actions. If the LLC incurs debt or someone sues it, member personal assets are often exempt. LLCs don’t pay the double taxation of standard corporations, and if they ‘pass through’ profits to member tax returns, LLC owners may be able to deduct 20% of their business income with the 20% pass-through deduction established under the Tax Cuts and Jobs Act of 2017.

How to Use an LLC: Downsides

The IRS (and others) doe not see an LLC as a separate entity, hence it’s not good for fully separating business from personal credit. LLC members end up paying employment taxes on the entire net income of the business. LLCs can’t issue shares so they can’t use the issuance of shares as a form of fundraising.

Annual/biennial renewal fees are often higher than for corporations. Setup fees (as of 2021) run from $40 (Kentucky) to $500 (Massachusetts). And annual/biennial renewal fees run from $0 (Arizona, Idaho, Minnesota, Missouri, New Mexico, Ohio, South Carolina, and Texas), to $800 (California, annually + $20 every other year).

Why and How to Use an LLC – is it Right for Your Business? Takeaways

If you want to build credit for your business, an LLC will not offer you the protection that a C corporation or an S corporation does. But an LLC is better than a partnership or a sole proprietorship, when it comes to personal liability.

If you want to (potentially) save on taxes, then an LLC might be a good idea. But if your business truly takes off, your personal taxes will be higher, even with a 20% deduction.

The post Why and How to Use an LLC – is it a Good Choice for YOUR Business? appeared first on Credit Suite.

The Truth About Business Funding With No Personal Guarantee Credit

Does business funding with no personal guarantee credit exist? The simple answer is yes. How do you get it, and do you even need it? Those are harder questions to answer. 

What’s the Real Story Behind Business Business Funding With No Personal Guarantee Credit?

To some, it may seem like a mythical idea, a unicorn if you will.  Even if you have strong business credit, many lenders will ask for a personal guarantee on a business loan. So, what are companies talking about when they say you can fund a business with no personal guarantee credit?  Let’s find out. 

What is Business Credit?

Before we can talk about no personal guarantee credit for business funding,we need to define a few terms. 

First, we’ll define business credit. Business credit is credit, like a credit card or other type of credit account, in the name of your business rather than in your name personally. When you apply, you use your business name, your business contact information, and your EIN instead of your social security number. 

What frustrates you the most about funding your business? Check out how our free guide can help.

Then, the business is responsible for repayment. Sometimes, the account does not report to your personal credit report. Meaning, your personal credit scores will not be affected by your business credit accounts. 

Business Credit vs. Business Credit Report

Now, let’s talk about your business credit report. This is a report, like your personal credit report. Lenders use it to evaluate the creditworthiness of the business. It consists of the credit history of the business, the business credit score, and other data. The business credit score is made up of the payment history of those business credit accounts that actually report to the business credit reporting agencies. 

Not all business accounts will do that. But those that do, are the ones that make up the score on the business credit report. 

Personal Guarantee

To understand what no personal guarantee credit is, you have to know what a personal guarantee is. If you get a credit account with a personal guarantee, you are responsible for repayment. By definition, all personal credit accounts have a personal guarantee.

This could mean a hard pull on your personal credit, which can lower your personal credit score. However, in theory, if your business has an account in its own name and it is set up to be a separate entity from you, the owner, it is responsible for its own debt. 

Still, many companies require a personal guarantee from the business owner before extending business credit, especially small businesses. This is due to many factors, including data from the Bureau of Labor statistics that states 20% of new businesses fail within the first year, 45% within the first 5 years, and 65% in the first 10 years. In fact, only 25% of new businesses make it 15 years or more. 

It’s easy to see why lenders and credit card companies would ask for a personal guarantee from business owners when it comes to business credit.

What frustrates you the most about funding your business? Check out how our free guide can help.

Can You Get No Personal Guarantee Credit for Business Funding?

The short answer to this is yes, but it is not that simple. First, most business accounts that do not require a personal guarantee are designed for larger businesses or older businesses. 

There is very little out there when it comes to no personal guarantee credit for small, newer businesses. There are some vendors that will extend net terms without a personal guarantee if your business meets certain requirements.

Requirements may include a certain minimum time in business, a minimum average balance in a business bank account, specific annual revenue, and more. Other than that, there are a couple of business charge cards you can get without a personal guarantee.  For example, Brex and Divvy both offer this type of product.

The catch is, these are charge cards, not credit cards. So you have to pay the balance off each month. Basically, it’s like a card that you can use anywhere and you have net 3o terms on the balance. It’s similar to a vendor account, but more flexible.

There are also business credit cards available without a personal guarantee, but only if your business credit is strong enough. In general, your business needs to be earning millions in annual revenue to qualify for these cards.

What’s so Bad About a Personal Guarantee?

Why try to avoid a personal guarantee? No one likes risk. That’s why businesses require a personal guarantee and why business owners don’t love to give one. However, if you have true business credit that requires a personal guarantee, the business will have to pay first. You will be personally liable for anything that the business cannot cover. Still, you will not be first in line for all of it. 

A Personal Guarantee can Accelerate Your Business Growth

A better option is to realize that if your business is small and young, you are likely going to need a personal guarantee for much of the funding. Yet, you can work to reduce your liability in a number of ways. The first way to do that is to incorporate your business as a corporation, S-corp, or LLC. Your business attorney or accounting professional can help you with that. 

Next, you can look at funding options that do not require credit at all. Does this debt-free funding even exist? Sure it does.

Grants, Crowdfunding, Angel Investors, ROBS, and more can be used to get as much funding as possible without any repayment. 

Work on Building Business Credit

Then, you can work on building a strong business credit profile for your business, including a strong business credit score.  This will help you be able to get funding for your business without as much reliance on a personal guarantee. Basically, the stronger the business credit, the less the lender feels the need to rely on the owner’s creditworthiness.

The key to this is to look for creditors who will report positive payment history to your business credit profile. Even some lenders that require a personal guarantee may report payments to your business credit report and not your personal credit report.

Stop worrying about the personal guarantee and worry more about building business credit so you can reduce the amount of personal guarantee required to get the funding you need.

Get Funding While Building Business Credit

If you cannot get all of the funding you need for your business with non-debt options, and your business is young and small, you may very well have to use a personal guarantee to get the funding you need in the beginning. That is okay. 

What frustrates you the most about funding your business? Check out how our free guide can help.

The key is to know exactly what you are getting. Definitely make sure you apply with your business name, EIN, and contact information. Then find out what credit agencies they report to. If they report to the business credit agencies like Dun & Bradstreet, Experian Business, or Equifax (Business), that is a good thing.  It will help you reach your goal of building business credit faster.

If they report to personal credit, so be it. Just keep working through the process of building your business credit profile as quickly as possible.  Then, you can tip the scales away from your personal liability as much and as quickly as possible. 

Debt-Free Funding

If you really want to stay away from a personal guarantee, you can try one of these debt-free funding options. Just remember, debt-free doesn’t mean cost-free. There are always some costs associated with funding.

Rollover for Business Startups (ROBS)

This is a 401(k) Rollover for Working Capital program. It’s also known as a Rollover for Business Startups (ROBS).  Per the IRS, a ROBS qualified plan is a separate entity with its own set of requirements.  The plan owns the business through its company stock investments, rather than the individual. 

This type of financing isn’t a loan against your 401(k), so there’s no interest to pay. It does not use the 401(k) or stocks as collateral. Instead, this is simply a movement or change of custodian. The plan has to be a plan from an employer you no longer work for, and you can no longer be contributing. 

Crowdfunding 

Crowdfunding is a way of getting multiple smaller donations from a lot of individuals. Hence the term “crowd” in crowdfunding. There are many options for crowdfunding platforms, but be sure you know what you are getting into. Many crowdfunding platforms make you give all of the funding back if you do not make your goal by the end of the campaign.

They will take a percentage of the donations. That’s how they make their money. In addition, they may push to have you deliver on your promises. Crowdfunding tends to work best when donors can personally connect with a product or service . Straightforward businesses may not do so well. 

The kinds of businesses which do the best often associate with products not quite on the shelves yet or artistic endeavors.

Angel Investors

While there are “professional” angel investors out there, an angel investor can be pretty much anyone. It  could be a friend or family member sitting on home equity, or local professionals who are looking to invest. Consider people you know well and people you may not know so well. 

What frustrates you the most about funding your business? Check out how our free guide can help.

Grants

There are some grant options available, and of course those do not have to be repaid. However, they are highly competitive, and it is unlikely it will be enough to fully fund your business. Also, grants will require time on your part to prepare all necessary paperwork.  Some even require an application fee. 

Other Funding Options

No personal guarantee credit for business funding is great to have.  Still, chances are you are going to need a personal guarantee to get funding at some point. There are a lot of good options out there. In fact, SBA loans are a great option. You can also look into alternative lenders like Fundbox and OnDeck or Accion. 

Using a personal guarantee to get the ball rolling while you work on building your business credit profile is a valid option. It is what most business owners have to do. But, you need to build a strong business credit score so lenders can start to rely more on the credit worthiness of your business than you personally. Credit Suite has a whole program designed to help do just that. Find out more about the Business Credit Builder now. 

The post The Truth About Business Funding With No Personal Guarantee Credit appeared first on Credit Suite.

How to Create Your 5 Year Business Credit and Funding Blueprint

What’s YOUR Business Credit and Funding Blueprint? So it should be obvious – when considering business credit and funding, you need a blueprint. Because traveling without a map won’t get you anywhere. So, where do you see your business in five years or more? Do you double your revenue? Open a new office? Replace your … Continue reading How to Create Your 5 Year Business Credit and Funding Blueprint

How to Create Your 5 Year Business Credit and Funding Blueprint

What’s YOUR Business Credit and Funding Blueprint?

So it should be obvious – when considering business credit and funding, you need a blueprint. Because traveling without a map won’t get you anywhere.

So, where do you see your business in five years or more?

  • Do you double your revenue?
  • Open a new office?
  • Replace your equipment?
  • Hire more people?
  • Retire and pass your business along to a family member or sell the company?
  • Or something else?

Your Business Plans and Future

All of these scenarios require funding! Even going concerns with stable, steady revenue can experience emergencies, or need to seize a business opportunity quickly and before they have the funds. All businesses can use business credit to achieve their aims – whatever they are

Instead of year by year, let’s go phase by phase since some of these will overlap in time.

But even if you’ve already been there, done that, checking out the earlier phases could help you see if you missed anything. And if you’re just starting out, checking out the later phases could show you your business’s future so you can be ready.

Phase 1: Setup and Launch

You’re at the starting line and the race official has just yelled, “Go!”

Setting up a business is a task with a lot of moving parts. It’s a lot more than just hanging out a shingle. The way your business is set up can directly affect the ability of your business to succeed

This first phase covers your first six to twelve months of existence.

Fundability

Fundability is a business’s ability to get funding. A lot of the power to get business money is in your hands. A business starts with no credit profile. As a result, what’s on an application is all that’s reviewed for approvals. So your application must be very strong. Nearly half of all companies fail in their first 5 years, and about 2/3 in the first 10. As a result, new businesses don’t seem fundable to lenders. You can change that by building for fundability from the very start.

Business Name

Check with your Secretary of State –a business name may have to be unique. Make sure your SOS has all the necessary information for your company, and it’s up to date and correct. Make sure that you are in good standing with them and that your entity is active. You will have to file annual reports and pay an annual fee to stay active. Keep the name of a high-risk or restricted industry out of your business name. Your business can be Rachel’s rather than Rachel’s Gas Station. There is nothing underhanded about this – it is completely above board and honest

A common reason for loan and credit card application denials is the lender can’t easily locate a business offline or online. So make it painfully easy for lenders and credit providers to find your business. Make sure the business name is exactly the same on corporation papers, licenses, utility statements, and bank statements. Also make sure the business name and all other information is the same on every online listing you can find.

Business Address

This must be a real brick and mortar building, a deliverable physical address. This can never be a UPS box or a PO Box. Some lenders will not approve and fund unless this criterion is met

A virtual address can also be a good idea if you need to hold a meeting or an interview, and it’s a lot more professional than doing this at your kitchen table. We like Regus, Davinci, and Alliance Virtual Offices. But keep in mind that there are credit providers that will not accept virtual addresses.

Business Entity and EIN

Get a free EIN for your business and choose your business entity at IRS.gov. Use your EIN to open a bank account and to build a business credit profile. To truly separate business credit from personal credit your business must be a separate legal entity, not a sole proprietor or partnership. Only incorporating creates a new and separate entity which by default will reduce your personal liability. Other entities (like partnerships) don’t. File this with the Secretary of State for your state. Make sure your entity is set up in the same state as your business address.

NAICS Codes

The IRS website is also where you choose NAICS codes. These codes are for the purpose of collecting, analyzing, and publishing statistical data on the US business economy. Some businesses are considered to be risky by their very nature. Often higher risk comes from chances of injury or frequently engaging in cash transactions. Risk matters because there are several industries where lending institutions are hesitant to do business.

If more than one NAICS code can apply, you don’t have to choose the one that’s higher risk

And if only high risk codes apply, there’s nothing at all wrong with changing your business to match a related but lower risk code.

Business Licenses

Contact State, County, and City Government offices to see if there are any required licenses and permits to operate your type of business. Licensing requirements differ depending on state, town, and industry. Always make sure you have the proper licensing for your corporation

Having licensing builds credibility in your business, and that can help you get more customers.

Business Phone and 411 Listing

It’s very easy and inexpensive to set up a virtual local phone number or a toll free 800 number

A cell or home phone number as your main business line could get you flagged as un-established – but VOIP is okay. If you don’t want customers calling you at home all day, do not use a personal cell or residential phone as the business phone number. It also helps with fundability to have a dedicated business phone number. Your number must have a listing with 411 for most credit issuers and lenders to approve you. Check for your record to see if you’re listed and your information is accurate. No record? Then use ListYourself.net to get a listing.

Web Domain and Professional Website

Lenders and credit providers will research your corporation on the internet. It is best if they learned everything directly from your corporate website. Not having a professional website can hurt your chances of getting corporate credit. Buy web hosting from a hosting company like GoDaddy or HostGator. Your domain should be your business name, if possible. Add a company email address for your business on the same domain as your website. This often comes with a website domain provider. This is not just professional; it also greatly helps your chances of getting approval from a credit provider. Do not use Yahoo, AOL, Gmail, Hotmail, or similar kinds of email.

Business Bank Account in the Business’s Name

You must have a bank account devoted strictly to your business. The IRS does not want you commingling funds. Make accounting easier and reduce the risk of audit at tax time

Keep personal and business funds separate. Having a business-only bank account makes that easy.

Business Merchant Account

Getting a business merchant account is a smart way to help out your business. Now your business will be able to accept credit and debit cards. Studies show that customers will spend more if they can pay by card. This also increases your finance options and is generally more secure.

Get Set Up With the Business Credit Reporting Agencies

Go to D&B’s website and look for your business. Can’t find it? Then get a free D-U-N-S number on the D&B site. A D-U-N-S number plus 3 payment experiences leads to a PAYDEX score. You need a D-U-N-S number to start building business credit. Once you are in D&B’s system, search Experian and Equifax’s sites for your business.

Your Business Credit History

Get the most favorable funding by paying all bills on time, to get:

  • A PAYDEX score of 80
  • Equifax Credit Risk Score of 90 or better
  • A good FICO SBSS score, which is driven (in part) by on-time payments and business credit history
  • For Experian, historical behavior (payment history) is 5-10% of the total score

Business Credit Building from the Ground Up

Start with vendor accounts, a proven way to start building business credit. Vendor credit is generally not attached to a bank. So under federal law a Social Security number is not required. When not attached to a bank, there is no Social Security requirement for starter vendor credit

This is unlike bank loans and bank cards. You can legitimately leave the SSN field blank, which will force them to pull your business credit under your EIN.

Business Credit Building with Credit Cards with a PG

Every step and every credit provider is designed to help your business

It’s designed to help you qualify for business credit cards that you will actually use. As you continue building, your time in business will help. But to get started, you may need to give a personal guarantee. That’s okay; that’s a part of the strategy.

Good Personal Credit

If you already have good personal credit, then you’re all set. If not, you can work with a credit partner or guarantor. And never stop working on improving your personal credit, no matter what shape it’s in.

Phase 1 Funding Options

In Phase 1, it’s trickiest to get business credit and funding. But it’s not impossible! You will, though, need to think outside the box.

Our Credit Line Hybrid

A credit line hybrid is a form of unsecured funding. Our credit line hybrid has an even better interest rate than a secured loan. Get some of the highest loan amounts and credit lines for businesses. Get 0% business credit cards with stated income. These report to business CRAs so you can build business credit at the same time. This will get you access to even more cash with no personal guarantee. You need a FICO credit score of at least 680 or a guarantor with good credit to get an approval. No financials required.

We also have an option for getting just personal credit cards with our Credit Line Hybrid.

Demolish your funding problems with 27 killer ways to get cash for your business.

401(k) Financing

This is not a loan and you will not have to pay an early withdrawal fee or a tax penalty. You put the money back by contributing, just like with any 401(k) program so you won’t lose your retirement funds. The IRS calls this a Rollover for Business Startups (ROBS), which is a separate entity with its own set of requirements. The plan, through its company stock investments, rather than the individual owns the trade or business. This financing isn’t a loan against, your 401(k), so there’s no interest to pay and does not use the 401(k) or stocks as collateral.

Instead, this is simply a movement or change of custodian. Your 401(k) must have more than $35,000 in it and cannot be from a business where you are currently employed. You can get 401(k) financing even with severely challenged personal credit.

Stocks Financing

Some lenders will make loans using securities as collateral. Securities-based lending provides ready access to capital. The only restrictions to this kind of lending are other securities-based transactions, like buying shares or repaying a margin loan. You continue to earn interest on stocks pledged as collateral. But you will have challenged personal credit.

Sell Part of Your Business’s Equity

Your business and its potential are assets. Talk to people you know about angel investing

Angels buy a smallish stake in your company. They usually don’t expect as big a return as venture capitalists do. VCs might also buy a stake, but they generally just want paradigm-changing businesses. Another way to sell a part of your equity is to take on another founder or partner.

Crowdfunding and Grants

Note: crowdfunding success isn’t guaranteed. Crowdfunding platforms like Kickstarter will take a percentage of any money you raise. But it can still be a way to get a cash infusion without having to give up equity. If you’re very good online and have a compelling product and story, then you’re more likely to succeed than most people. Grants can come from the government or private businesses. Expect a lot of competition, difficult entry requirements, and not a lot of money. But it’s another way to get some cash without having to sell a chunk of your business .

Phase 1 Goals for Business Credit and Funding

Right now, you have minimal Growth Monthly Revenue (GMR). This is a fast paced growth plan, throw it against the wall and take what you can get right now. Look at some short sighted daily and weekly goals for quick cash and growth. During this phase your focus is on the bare essentials to create a viable business. Your goal is to build your consistent revenue to $10,000 per month, and continue to work on improving your personal credit.

Phase 2 Development: $1,000 to $10,000 GMR

In Phase 2, you should start developing marketing. ow you’re at an aggressive sales pace adding nurture and longer sales cycles. Use medium term monthly growth planning (campaign to campaign). It’s time for software implementation and system development. You’re building the blocks of how your business is going to be, now and in the future. This phase should run somewhere between the first six to 24 months from launch.

Business credit and funding starts to get easier.

Phase 2 Credit Options

Your credit options will open up once you get to Phase 2, including:

  • Business Credit Cards (No PG)
  • Advanced Vendors
  • Vehicle Financing
  • Cash flow Management with providers like Brex and Divvy
  • Business Credit Cards With No Personal Guarantee

As you continue to build exceptional business credit and pay your bills on time, credit providers trust you more and more. You can get higher limits and better terms. And you can start to get business credit cards with no PG.

Advanced Vendors

There are many vendors that do not report to the business credit reporting agencies unless you default. They’re still a good idea, because credit can help you beyond business credit building

Not having to put up 100% of the costs of equipment or a building or anything else can help with budgeting. Credit can sometimes be the only way to take advantage of a limited time opportunity if you don’t have the money right now. And if your business credit cards offer rewards, cash back, or points, then using them is to your advantage.

Vehicle Financing

Vehicle financing is a great way to get a business vehicle without having to wait until you can just pay cash and drive it off the lot. Note: business owners may be required to personally guarantee vehicle loans. If you are a co-borrower the loan will most likely report to your personal credit report.

Some loans have a prepayment penalty and charge you for paying ahead. It is a good idea to have a loan proposal. A loan proposal should detail your business, loan needs, and financial statements.

Cash Flow Management

Managing small business finances can be overwhelming. There are a number of tools that can help streamline the process. Options like Brex, Divvy, Expensify, Lola, and more are growing in popularity. Which one is right for your business?

Brex

Brex is a business money management system that integrates with your accounting software

It allows you to track expenses and, depending on the level of service you choose, it can also help with paying bills and controlling spending. Brex has a partnership with the FDIC and your funds are secure. Everyone who opens a Brex cash account gets a corporate card. Brex reports any payments to Dun & Bradstreet

Divvy

One thing to know: Divvy is very similar to Brex. Divvy reports to the Small Business Finance Exchange, which in turn provides data to all SBFE partners, including business credit bureaus. As of April 2021, they also report to Dun & Bradstreet directly.

Demolish your funding problems with 27 killer ways to get cash for your business.

Phase 2 Funding Options

In Phase 2, your funding options also open up, to:

  • Merchant Cash Advances
  • Revenue Lending
  • Lines of Credit (Fundbox)
  • Equipment Financing/Leasing
  • Invoice Factoring

Merchant Cash Advances

An MCA technically isn’t a loan; it’s a cash advance based on the credit card sales of a business. A small business can apply for an MCA, and have an advance deposited into its account fairly quickly. So you can offer Net 30 terms but not have to wait a month to get paid. With an MCA you get funding based strictly on cash flow as verifiable per business bank statements. A lender mainly just wants to see consistent deposits.

Business Revenue Lending

You can technically qualify with only one year in business, but the annual revenue requirement is high enough that phase 2 may make more sense. You can raise capital from investors who get a percentage of the enterprise’s ongoing gross revenues in exchange for money invested until a predetermined amount is paid. Often this predetermined amount is between 3 – 5 times the original amount invested. Monthly payments will fluctuate with revenue highs and lows and will continue until you’ve paid back the loan in full.

Fundbox

Fundbox will connect directly to your online accounting software when deciding whether to fund your business. You can get revolving line of credit for up to $100,000. Fundbox will auto debit your weekly payment from your bank account. You don’t need to show a minimum personal credit score or a minimum time in business, but ideally you must have 6 months in business or more.

Equipment Financing

Use a loan or lease to purchase or borrow hard assets for your business. Physical assets can include items such as a restaurant oven or a company car. Pay predictable amounts every month. You can build business credit on a program like this.

Equipment Leasing

Or lease equipment, rather than buy it outright. You will often put down less money than you would if you were buying the equipment. You may be able to negotiate flexible terms with an equipment lease, and it’s easy to upgrade equipment after your lease ends. This is helpful if your equipment is something like a computer which quickly becomes obsolete.

Equipment Sale-Leaseback

If you already own your equipment free and clear you can use that as collateral for financing

Sell equipment to a lender for cash. Then lease it back from them. You can unlock Section 179 tax savings, and depreciate your entire equipment purchase in the first year. You’ll need at least one larger piece of higher value equipment to qualify.

Invoice Factoring

If you have open invoices and are extending credit to customers in some form, then you can get paid faster with factoring. Usually this involves invoices with net terms, like net 30, 60, or 90. To be paid faster, you turn those invoices over to a factoring company. They immediately give you an agreed upon percentage of the total of the invoices, like 80%. When your customer pays, the factoring company keeps their fee, and they send you the rest. But note – factoring only works if your customers pay.

Phase 2 Goals for Business Credit and Funding

Your goals should be:

  • Strong Business Credit (10 to 12 Accounts)
  • Good personal credit
  • Build consistent revenue to $10,000 or more a month

Always develop business connections in your community and with potential lenders.

Phase 3: Growth: $10,000 to $2 Million GMR

Successful growth…it’s working! It’s time to start optimizing systems and operations. You’ll be undergoing massive team and infrastructure development,  and long term growth and planning for semi-annual to annual focus lifetime customer value. You’ll need to make some high level strategic hires (Managers, VP’s, Essential C levels). This phase will happen at about 24 months or more from launch.

Business credit and funding gets a lot easier now.

Phase 3 Credit Options

Your Phase 3 credit options put your Phase 1 and Phase 2 options on steroids, with:

  • Team access to vendors and cards
  • Continuing to grow your vehicle fleet with vehicle financing
  • Vendor portfolio growth

Phase 3 Funding Options

Phase 3 opens your funding options up to:

  • All Alternative options available
  • SBA Loans
  • Bank Loans

Alternative Loans (also called private lending)

Private lenders are generally funded by investors or by banks, or both. Private lenders are in the business of taking funds from private investors. They make private business purpose loans with those funds. This often involves real estate. These can be hard money loans with shorter terms.

Alternative Options

Alternative lending also means online lending. But for certain industries, online lending is one of the only ways to get money. So let’s look at the cannabis industry, for example. Medical cannabis is legal is most of the country, yet more traditional lenders are still less likely to approve a loan. But lenders that specialize in cannabis industry lending are out there.

SBA Loans

More time in business will make SBA loans a real possibility for your business. It’ll be easier to get an SBA loan in Phase 3 versus earlier. This is because you can more readily show your business is established and making money. Demonstrated profitability and responsible credit and bank account management will improve your chances of getting an approval for an SBA loan. Also – SBA loans have great terms! So there’s a reason why you should be striving to be eligible for one.

Bank Loans

Banks are often the first place we think of when we thinking of financing. But big banks only sign off on about 25% of the small business loan applications that come their way. Still, term loans often have lower interest rates than many other funding options. They also tend to be for higher loan amounts. But you will most likely have to undergo a personal credit check and/or provide collateral.

Demolish your funding problems with 27 killer ways to get cash for your business.

Phase 3 Goals for Business Credit and Funding

In Phase 3, your mission is to take your business to the next financial level, so your goals are:

  • Profitability (so as to calculate loans)
  • Maintaining good personal and business credit
  • Build up to $2,000,000 in annual gross revenue
  • Maximizing leverage of cash flow with vendors and business credit

Grow Your Vendor Portfolio with Retail Credit

Retail credit comes from major retailers like Staples. You can buy everything from office supplies to power tools. Retailers will check whether your business information is uniform everywhere. They will also check whether your business is properly licensed. Terms can be revolving. You will need at least 3 (more would be better) accounts reporting to the business CRAs.

Grow Your Vendor Portfolio with Fleet Credit

Fleet credit is used to:

  • Buy fuel
  • Maintain vehicles of all sorts
  • Repair vehicles

These tend to be gas credit cards. But there may be a minimal time in business requirement.

Grow Your Vendor Portfolio with Business Credit Cards

Business credit cards are more universal-type credit cards, like MasterCard. So they can be used pretty much anywhere. These cards may even have rewards programs. Terms can be revolving. Often you will need to have at least 14 accounts reporting to the business CRAs. Also, there can be longer time in business requirements.

Phase 4: Maturity: $2M to 5M+ Annual Income

Your Business Credit and Funding Blueprint Credit SuiteConsistent growth is key. You’re aiming for long term consistent and stable growth,  and moving toward market domination (Competitor Buyouts and Acquisitions). Product development and expansion becomes critical for longevity. Because now it’s time for the big hire. You’re going to fill out C Level, Directors, and middle management. This phase will happen at around four to five years from launch.

It should be no problem to get business credit and funding when you’ve hit this stage.

Phase 4 Credit Options

By Phase 4, the sky is pretty much the limit! You should be able to get:

  • Most major credit cards with no PG
  • All vendors should be accessible

You should be able to leverage reports for specific vendors. This includes asking for a credit line.

Phase 4 Funding Options

In addition to everything we’ve already talked about, your business can take full advantage of:

Private equity

  • Investors
  • You might even sell shares in your corporation, or go public!
  • Phase 4 Goals for Credit and Funding

Now you’re playing the long game. Your mission is to look to the future and help your business for decades to come.

Therefore, you need to:

  • Balance your costs vs your cash flow vs your business’s profit
  • Leverage funding for expansions and buyouts

And you should be maximizing leverage of cash flow with vendors and business credit.

Phase 5: Exit

By this time, your business should be very well established. At this phase, you want to cash in on all the work you have invested. This is where the funding and credit has the long game return. A Business Credit Portfolio is transferable and increases the value of your business.

Your proven track record with merchant cash advances or revenue lending pays off big time, since it can keep business cash flow moving through the ups and downs. Having a proven track record with the SBA, and a profitable banking relationship, will improve the value of your business as well. People want to buy something they can lend against if they need to.

Phase 5 Business Credit and Funding Options

Selling can mean you’re retiring, or maybe you’re exchanging one form of entrepreneurship for another, and want to change industries yet remain an entrepreneur.

In Phase 5, you can:

  • Self-fund the sale in structured buy outs
  • Go to the SBA for acquisition money

In essence, you should be prepared to sign for your own buyout. Because a profitable, seasoned business can be an exceptionally valuable legacy.

Your Business Credit and Funding Blueprint: Takeaways

From startup to exit, your business credit and funding options will change. But navigating all the nuances can be tricky. Let’s walk that path together.

The post How to Create Your 5 Year Business Credit and Funding Blueprint appeared first on Credit Suite.

Could These Be the Best Intro APR Business Credit Cards?

Are There Good Intro APR Business Credit Cards Out There?

Are you looking for business credit cards with a 0% intro APR? We combed through several selections and weighed the pros and cons. The length of the introductory APR period was only one of our considerations. In fact, all of the cards we’re talking about today have no annual fee!

But let’s step back and look at some definitions first.

Annual Percentage Rates

APR is a yearly interest rate. It includes fees and costs paid on borrowed money (loans or credit). Lenders are required by law to disclose this. The rate comes from taking the periodic rate and multiplying it by the number of billing periods in a year. A credit card may have separate APRs for balance transfers, cash advances, or other special offers. If offers are subject to an expiration date, the relevant balance will usually revert to your default APR.

Variable Rate (or Variable APR)

This is an annual percentage rate that can change throughout the year. It can be an introductory APR that changes after a specific period of time. Variable APRs will likely change if the Prime Rate changes. So it makes sense to pay attenti0n to financial news. That way, you know if and when the Prime Rate changes.

Introductory APRs

There are a lot of business credit cards which have a 0% intro APR. The length of the introductory period can vary. So can the APR charged after the introductory period expires. Always check the fine print because there may be other charges that apply. They could negate the benefit of the introductory APR. Note: late payments can often be subject to the higher, post-introductory APR.

Honorable Mention: Get Product Savings

Regions Visa Business Enhanced Credit Card

First of all, consider the Regions Visa Business Enhanced Credit Card. You can earn Regions Relationship Rewards on qualifying purchases. You can redeem these for cash, statement credits, travel, and more. And you also get access to Visa SavingsEdge which provides an automatic savings of up to 15% on eligible purchases. Discounts appear in the form of statement credits. Pay no annual fee.

Get a 0% introductory APR through the end of the sixth billing cycle after account opening. Then pay a 11.49-22.49%, per creditworthiness. Pay a 11.49-22.49% balance transfer APR. This is a good card if you can wait for perks as the statement credits for both programs may take a cycle to show up on your account. But it’s also a decent card for interest rate – if you’ve got good personal credit scores.

Business Credit Cards with 0% Introductory APR for 12 Months and Cash Back

While these two cards had the longest intro APR period we found, their perks were … okay.

#10. Chase Bank Ink Business Unlimited®

With the Chase Bank Ink Business Unlimited® card, you get a $750 bonus cash back if you spend $7,500 in the first 3 months after account opening. Pay no annual fee. Get 1.5% cash back unlimited. Pay a 0% APR on purchases for the first 12 months after account opening. Then pay 13.24-19.24% per creditworthiness. Balance transfer APR is 13.24-19.24% per creditworthiness. If you have several computers or other expensive equipment to purchase, buy them fast to take advantage of the cash back bonus

#9. Chase Bank Ink Business Cash®

For somewhat decent interest rates, check out the Chase Bank Ink Business Cash® card. Pay 0% APR on purchases for the first twelve months. And then pay 13.24-19.24%. you pay no annual fee.

Get 5% cash back on the first $25,000 you spend on certain business products. These include office supply stores, internet, cable, and phone services. This works out to 4% added cash back rewards on top of 1% cash back rewards earned per purchase. The $25,000 flat spending limit resets every year. You can get $750 bonus cash back if you spend $7,500 in the first 3 months after account opening.

It’s pretty hard to hit the minimum spend. The agreement does not prohibit using your card to buy pricier items like plane tickets, vehicle repairs, or even heavy equipment. Still, you may find that using other means, like equipment financing or fleet credit, would make for a better deal for your business.

Score the best business credit cards for your business. Check out our professional research

Business Credit Cards with 0% Introductory APR for 9 Months and Triple Points on Gas

#8. Bank of Hope Business Rewards Visa® Credit Card

Take a look at the Bank of Hope Business Rewards Visa® Credit Card. Pay no annual fee. There is a 3% balance transfer fee with a minimum of $5. Earn 5,000 bonus points after spending $1,000 in the first three months. And earn triple points on gas. Get double points on travel and dining. Earn one point per dollar on all other purchases.

Pay a 0% intro APR for nine months. Then pay a variable APR 12.49%, 16.49% or 20.49% per creditworthiness. It should be easy for most entrepreneurs to meet the spend required for the points bonus. Triple points on gas are particularly helpful if yours is a business requiring a lot of time on the road. Say, trucking. If your credit is good enough to get the lowest APR after the introductory period ends, this could be a great card for you.

Business Credit Cards with 0% Introductory APR for 6 Billing Cycles and No Minimum Spend to Get a Bonus

#7. Mechanics Bank Visa Business Real Rewards

For no minimum spend, check out the Mechanics Bank Visa Business Real Rewards card. Pay no annual fee. Get 1.5 points per month per dollar. And get 2,500 bonus rewards points after your first purchase. Enjoy a 0% introductory APR for purchases and balance transfers for the first six billing cycles. Then pay 13.99-22.99% per creditworthiness. The bonus is decent. Since there’s no minimum spend, it begs the question. Can you get 2,500 bonus rewards points for buying a pen?

Business Credit Cards with 0% Introductory APR for 9 Billing Cycles and Travel Perks

#6. Bank of America Business Advantage Travel Rewards Credit Card Platinum + MasterCard

Take a look at the Bank of America Business Advantage Travel Rewards Credit Card Platinum + MasterCard. Pay no annual fee. Get 30,000 bonus points when you make at least $3,000 in new net purchases. They must post to your account in the first 90 days. Earn 1.5 points per dollar spent. Get triple points per dollar spent on travel. Pay a 0% intro APR for the first nine billing cycles. Then pay 12.24-22.24%.

The bonus points offer is generous. And the spend is relatively easily attainable. If your business requires a lot of traveling, this is a good card.

Score the best business credit cards for your business. Check out our professional research

Business Credit Cards with 0% Introductory APR for 6 Months and Get Points or Cash Back

These two cards are so similar, they came up as a tie. But if we had to choose, we would pick the cash card, as cash never expires.

#4. (tie) Zions Bank Visa Amazing Cash® Business Credit Card

For decent cash back rewards, check out the Zions Bank Visa Amazing Cash® Business Credit Card. Get 3% cash back on select business purchases. These include office supplies, cell services, internet, telecom, and cable TV. And get 2% cash back on select business travel purchases. These include airlines and vehicle rentals.

And get 1% cash back on everything else. Pay a 0% introductory APR on balance transfers for the twelve months after account opening. Then pay a 14.24% variable APR afterwards. Pay a 3% balance transfer fee for each transfer. A $10 minimum applies.

Get a credit limit up to $250,000. Pay no annual fee. There are no rewards fees. Pay a 0% introductory APR for the first 6 months after account opening. Then pay a 14.24% variable APR after.

The upper limit is good. And the varied cash back rewards are decent.

#4. (tie) Zions Bank Visa Amazing Rewards Business Credit Card

With the Zions Bank Visa Amazing Rewards Business Credit Card, you pay no annual fee. There is a 0% intro APR on balance transfers for twelve months. Then pay 14.24% variable. Get three points for every dollar spent on select business purchases. These include office supplies, cell services, internet, telecom, and cable TV.

Get two points for every dollar spent on business travel purchases. These include airlines and vehicle rentals. Get one point for every dollar spent on everything else. Pay a 0% introductory APR for the first six months. Then pay 14.24% variable. Enjoy limits to $250,000. The upper limit for this card is good, and the opportunity to earn points is decent.

Business Credit Cards with 0% Introductory APR for 6 Months and a Generous Points Bonus

#3. Union Bank Business Preferred Rewards Visa Credit Card

Consider the Union Bank Business Preferred Rewards Visa Credit Card. Get a 50,000 introductory reward points bonus when you spend $5,000 in the first three months. Enjoy quintuple points per dollar spent to $25,000 annually on select business expenses. These include office supplies, utility bills, and telecom services. And get one point per dollar spent above that. Get double points for each dollar spent up to $25,000 annually on gas stations and restaurants. And get one point per dollar spent above that. Plus, you get one point per dollar spent on everything else.

Pay a 0% introductory APR for the first six months. Then pay a 11.99-20.99% variable APR. there is no annual fee. This card has a great introductory points offer. And the amount you have to spend to get it isn’t bad.

Score the best business credit cards for your business. Check out our professional research

Business Credit Cards with 0% Introductory APR for 9 Billing Cycles and an Outstanding Post-Intro APR

#2. PNC Bank Cash Rewards® Visa Signature® Business Credit Card

Get a look at the PNC Bank Cash Rewards® Visa Signature® Business Credit Card. You can get a $200 bonus if you spend $3,000 in the first 3 billing cycles after account opening. Get 1.5% cash back on net purchases. There is no cash back limits. Pay no annual fee.

There’s a 0% APR for the first nine billing cycles after account opening. Then pay a 10.99-19.99% variable APR, per creditworthiness. With mostly lower post-intro period interest rates and an easy to meet spend, this card is can be a great choice.

Business Credit Cards with 0% Introductory APR for 6 Months and an Outstanding Post-Intro APR

#1. Zions Bank Visa Amazing Rate Business Credit Card

So the only card to beat PNC Bank’s lowest post-introductory APR was the Zions Bank Visa Amazing Rate Business Credit Card. You pay no annual fee. There is a 0% introductory APR for the first six months. Then pay 10.24% variable. Get limits to $250,000. This card has a good upper limit and the post-introductory APR is the best one we found.

Business Credit Cards with a Good Intro APR: Takeaways

Know the length of the introductory APR period, and the post-introductory rate. Those are over half the battle when deciding among business credit cards with an intro APR of 0%. Perks and annual rates should also play a part when you make your decision. And, no matter what, strive to pay your business credit card bills on time. Because if you do, then an introductory APR won’t matter to you.

The post Could These Be the Best Intro APR Business Credit Cards? appeared first on Credit Suite.

The Top 10 Best Business Credit Cards With No Annual Fee

How Many Credit Cards With No Annual Fee Are Out There?

There are tons of credit cards with no annual fee! Some only had an introductory period, whereas others had no expiration date for this benefit.

Business Credit Cards and Annual Fees

In both the business and personal credit worlds, annual fees are commonplace. To give the impression of more exclusivity, a card issuer might call them membership fees. But it’s the same thing.

Always consider annual fees when deciding whether to get a credit card. There’s a range of annual fees for business credit cards. They can run from a somewhat nominal $19 or so, to a double-take inducing $595.

For the cards we’re reviewing here, all of them offer no annual fee as a regular card feature. That is, none of these are introductory rates that will expire. But always read the fine print. Because if the APR is too high or the card provider is stingy with rewards or point or cash back, it may turn out that even a $0 annual fee isn’t enough to justify getting such a card. Let’s look at a variety of choices to fit different circumstances. Here’s our top 10 and two honorable mentions.

Business Credit Cards With No Annual Fee for Amazon Discounts

You can get Amazon discounts? Absolutely.

Honorable Mention: Amazon Prime Store Card

If your business shops at Amazon often, the Amazon Prime Store Card could be the card for you. You get a $60 Amazon gift card upon the approval of your application. Get 5% cashback on Amazon purchases. But limits seem to be low. There are reviews of this card on the Amazon website and you should check them before applying.

Business Credit Cards With No Annual Fee for Bonus Points with a Low Minimum Spend

Honorable Mention: Bank of Hope Business Rewards Visa® Credit Card

With the Bank of Hope Business Rewards Visa® Credit Card, you pay a 3% balance transfer fee which will never be less than $5. You can earn 5,000 bonus points after spending $1,000 in the first three months. Earn triple points on gas. Get double points on travel and dining. Earn one point per dollar on all other purchases.

Pay a 0% introductory APR for nine months. Then pay a variable APR 12.49%, 16.49% or 20.49% per creditworthiness after introductory period ends. It should be easy for most entrepreneurs to meet the spend necessary for the points bonus.

Triple points on gas are rather helpful if yours is a business requiring a lot of time on the road (say, trucking). If your credit is good enough to get the lowest APR after the introductory period ends, this could be a great card for you.

Business Credit Cards With No Annual Fee for a Bonus with No Minimum Spend

But a low minimum spend only gets an honorable mention. This is because we found a card where you can get a bonus with no minimum spend.

#10: Mechanics Bank Visa Business Real Rewards

With the Mechanics Bank Visa Business Real Rewards card, you get 1.5 points per month per dollar. Earn 2,500 bonus rewards points after your first purchase. Pay a 0% introductory APR for purchases and balance transfers for the first six billing cycles. Then pay 13.99-22.99% per creditworthiness. The bonus is decent and since there’s no minimum spend, it begs the question, can you get 2,500 bonus rewards points for buying a pack of gum?

Score the best business credit cards for your business. Check out our professional research

Business Credit Cards With No Annual Fee for Fair Credit

While the terms aren’t the best for this card, it can be tough to find a business credit card you can get if you’ve only got fair credit. Even rarer are such cards with no annual fee – where the annual fee doesn’t expire. This card hits all of those requirements.

#9: Capital One Spark Classic Business Credit Card (Visa)

Fair credit means you have FICO scores between 620 and 659. Capital One spells out that this card is for fair credit. Earn 1% cash back with every purchase, with no minimums. Pay a 26.99% variable APR for both purchases and cash advances. The lowest possible credit line $300.

For the Capital One Spark Classic Business Credit Card (Visa), the cash back percentage is low. And the interest rate is higher than for the other cards reviewed. But if your credit is only fair, or you don’t have a very long credit history, this card could be right for you.

Business Credit Cards With No Annual Fee for Members of the Armed Forces

This card has fantastic rates, but only a limited number of people will qualify.

#8: Navy Federal GO BIZ™ Rewards Card

The Navy Federal GO BIZ™ Rewards Card is available as either a MasterCard or Visa. Benefits differ depending on which card type you choose. Get 1 point for each dollar spent but rewards depend on if you have a Visa or MasterCard. With a Visa, you get access to Visa SavingsEdge. With a MasterCard, you get a collision damage waiver.

Pay no foreign transaction fees. There is no earnings cap. The APR can be as low as Prime+ 5.90%. You can get GO BIZ™ Rewards – points you can redeem for gift certificates, cash deposited into your savings account, and more.

Note: this card comes from a credit union. You must be a member first. The only persons who can be members of the credit union are persons attached to the military, the Department of Defense, or the National Guard and their families. If you can qualify for this card, the interest rate is stellar. And it isn’t just for an introductory period.

Business Credit Cards With No Annual Fee for a Long 0% APR Introductory Period

Not surprisingly, we felt the two Chase cards were a dead even tie. If we had to choose, we would pick Business Cash. This is because the cash back rewards seem to be more generous.

#6 (tie): Chase Bank Ink Business Unlimited®

Chase Bank Ink Business Unlimited® is a similar card to Chase Bank Ink Business Cash®, below. Except the rewards come in the form of cash back versus points. Get $750 bonus cash back if you spend $7,500 in the first 3 months after account opening. And get 1.5% cash back unlimited.

Pay a 0% APR on purchases for the first 12 months after account opening. Then pay 13.24-19.24% per creditworthiness. The balance transfer APR is 13.24-19.24% per creditworthiness. If you have several computers or other expensive equipment to buy, get it fast to take advantage of the cash back bonus.

#6 (tie): Chase Bank Ink Business Cash®

For a long 0% APR introductory period, and somewhat decent interest rates, check out this card. Pay 0% APR on purchases for the first 12 months. And then pay 13.24-19.24%.

With the Chase Bank Ink Business Cash® card, you get 5% cash back on the first $25,000 you spend on certain business products i.e. office supply stores, internet, cable, and phone services.

This works out to 4% additional cash back rewards on top of 1% cash back rewards earned on each purchase. The $25,000 flat spending limit resets every year. You can get $750 bonus cash back if spend $7,500 in the first 3 months after account opening.

It’s a bit difficult to hit the spend amount. Still, the agreement does not prohibit using your card to buy pricier items, such as plane tickets, vehicle repairs, or even heavy equipment. Still, you may find that using other means, such as equipment financing or fleet credit, would make for a better deal for your business.

Business Credit Cards With No Annual Fee for Travel

Business credit cards for travel can often be black and white for business owners. You either need one … or you don’t. If your business requires that you fly regularly, then read on.

#5: PNC Travel Rewards Visa Business Credit Card

With the PNC Travel Rewards Visa Business Credit Card , you get one mile per dollar in eligible net purchases. Earn double miles on the first $2,500 in eligible net purchases. Book your own travel and then redeem miles for a statement credit. No foreign transaction fees on purchases outside US. Pay a variable APR, 10.99- 19.99%, per creditworthiness.

The APR is good if your credit makes you eligible for the lower end of the spectrum. A statement credit for acting as your own travel agent is good, if you have the time to book your own travel. Double miles are welcome but it’s easy for a business owner to exceed the cap.

Business Credit Cards With No Annual Fee for Managing an SBA Express Loan

Much like with the travel credit card we just recommended, you either need this card, or you don’t.

#4: Zions Bank SBA Express Business Visa Debit Card

The unique Zions Bank SBA Express Business Visa Debit Card has floored us! Because – why doesn’t every SBA Express lender do things this way? Use this card to manage SBA Express loan money from Zions Bank, if you are already have an approval.

Get travel accident insurance and other credit card perks, which you would not normally get from an SBA Express loan. This card is best for SBA Express borrowers. If you’re an SBA Express borrower (or want to become one), we could not find a downside to getting this card.

Business Credit Cards With No Annual Fee for a High Credit Limit

High credit limits can be tempting. But business owners may be able to make up shortfalls with online lending, using several smaller credit cards together, or other forms of financing like merchant cash advances.

A high credit limit, though, is a lot easier to keep track of than a number of cobbled-together solutions.

#3: Zions Bank Visa Amazing Rate Business Credit Card

Pay a 0% introductory APR for the first six months. Then pay 10.24% variable. Limits to $250,000. The Zions Bank Visa Amazing Rate Business Credit Card has a good upper limit and the post-introductory APR is very good.

But note that most of the cards under review did not list their upper credit limits.

Score the best business credit cards for your business. Check out our professional research

Business Credit Cards With No Annual Fee for Significant Bonus Points

Bonus points, of course, are only good if you’re going to use them.

#2: Union Bank Business Preferred Rewards Visa Credit Card

With the Union Bank Business Preferred Rewards Visa Credit Card, you get 50,000 introductory reward points bonus when you spend $5,000 in the first three months. Get quintuple points per dollar spent to $25,000 annually on select business expenses. These are office supplies, utility bills, telecom services. And get one point per dollar spent above that.

Get double points for each dollar spent up to $25,000 annually on gas stations and restaurants. Plus, get one point per dollar spent above that. And get one point per dollar spent on everything else.

Pay a 0% introductory APR for the first six months. Then pay a 11.99-20.99% variable APR. This card has a great introductory points offer. And the amount you have to spend to get it isn’t bad.

Score the best business credit cards for your business. Check out our professional research

Business Credit Cards With No Annual Fee for a Good Cash Back Percentage Rate

Our number one card had a great cash back percentage which you can get for a significant amount of annual spending. And the cash back percentage doesn’t seem to have an expiration date. The other thing that attracted us to this card was a somewhat low APR, if you’ve got good personal credit. If your personal credit isn’t so great, then our #3 choice has a better APR with no expiration date.

#1: Huntington Bank MasterCard Voice Business Credit Card

With the Huntington Bank MasterCard Voice Business Credit Card, you earn 4% cash back on the first $7,000 spent per quarter. This is in one category of your choice. There is a choice of 10 categories. Hence the annual spend limit for 4% cash back is $28,000. If you annually charge $28,000, you’ll get a cool $1,120 back.

Earn 1% cashback on all other purchases.

Pay no foreign transaction fee. Pay a 10.99-21.99% APR per creditworthiness, which ties to the Prime Rate. If you know you won’t meet the spend limit, and your credit is already good so the APR is low, this can be an outstanding card.

Takeaways

There are a lot of business credit cards with no annual fee. You can get high cash back percentages. Or you can get high limits, or even bonuses. And you can even manage an SBA Express loan. Choose the option which works best for you. You don’t have to settle!

The post The Top 10 Best Business Credit Cards With No Annual Fee appeared first on Credit Suite.

Some Straight Talk on How to Get The Best Business Credit Card for YOUR Business

What is the Best Business Credit Card for Your Business?

Business credit cards are a part of business credit. Like other aspects of business credit, business credit cards can help you get products and services your business needs. You can use them to help smooth out cash flow peaks and valleys. And you can use them to build business credit. The best business credit card for your business can do many of these things.

Getting Approvals

Business credit cards run the gamut from starter vendors which don’t ask for much, to Tier 4 bank credit cards. And there can be cards where you must provide your Social Security number to satisfy a federal anti-money laundering law. As you might expect, the harder to get approvals, the more your business must do to meet credit provider requirements.

In general, approvals hinge upon:

  • Business credit scores. Mostly your history of paying your company’s bills on time.
  • Time in business. Since about 2/3 of all new businesses fail within the first 10 years, more time in business is a gauge of stability and ability to pay back any credit in use.
  • Personal credit scores. Many credit providers review personal credit scores, particularly if a business is new.

Avoiding Denials

Credit providers want to know you’ll pay them back. They also want to make sure there’s nothing fraudulent going on. When basic data (name, address) is inconsistent from one record to another, credit providers see that as fraud. They will deny the application. As a result, records consistency is vital for avoiding denials.

Incomplete applications are another reason for denials. So, if an application calls for certain documents, you’ve got to provide them. Such documents can include business plans, bank statements, and incorporation documents (if applicable).

Beyond Getting Approvals

There are tons of business credit cards out there. Just applying for the ones where you’ll get approval is a decent strategy when you’re first starting out with building business credit. But once your business credit scores improve, such as a PAYDEX score of 80, you can be a lot choosier.

Types of Business Credit Cards

For card types, you’re generally looking at:

  • Debit cards
  • Prepaid
  • Secured
  • Unsecured
  • Business charge cards
  • No PG business credit cards

Credit Card Feature Types

But the best business credit card for your business can also be divvied up by features, such as:

  • Credit cards for 0% interest (ongoing or introductory) rate
  • Low percentage interest rate (over 0% but still lower than the norm)
  • $0 annual fee (ongoing or introductory)
  • Cards that appeal to a social conscience/allow for donations to social causes
  • Bad credit/fair credit/average credit
  • Balance transfers
  • Travel
  • Points (other than travel points)
  • Cash back
  • Rewards
  • Statement credits/monetary bonuses
  • High Limits
  • Unique benefits (does not fit under any other categories)

Business Debit Cards

A business debit card is a card that works a lot like a business checkbook. The limit is the amount of funds you currently have in your business checking account. Every time you use it to make a purchase, the amount you charge comes from your account as a deduction.

Prepaid Business Credit Cards

A prepaid business card is a convenient alternative to carrying cash. It works just like a secured consumer credit card. Add funds to your account. Whatever amount you add is available for purchases.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines.

The Best Business Credit Card for You Might be Secured

A secured business credit card is for businesses with no credit or less than perfect credit history. An initial security deposit is necessary. This establishes your card’s credit limit. In most cases a minimum deposit of $500 is necessary. Once you start making purchases you will receive invoices like a regular credit card.

Unsecured Business Credit Cards

An unsecured business credit card works like an unsecured consumer credit card. Credit limits come from many factors depending on the card issuer. Factors in deciding credit limit can include personal credit and/or business credit scores. They can also include time in business, annual revenues and so on. These credit cards give your business the opportunity to earn incentives and rewards.

Business Charge Cards

A business charge card has all the convenience of a credit card. But it’s without the high price of interest. When using this card you must pay your balance in full each billing cycle. Since you can’t carry a balance, a charge card doesn’t have a periodic or annual percentage rate. Hence there is no rate for a charge card issuer to disclose.

No PG Business Credit Cards

A no PG business credit card is just what it sounds like. It’s a card you can get without a personal guarantee. This card will link to your EIN, not your SSN. And it generally requires no personal credit check or guarantee for approval.

Credit Cards for 0% Interest or a Low Percentage Interest Rate

A low percentage interest rate is over 0% but still lower than the norm. Many annual percentage rates tie to the prime rate. Lower or 0% rates are often introductory, and end after a certain time frame or number of billing cycles.

The Best Business Credit Card for Your Business Might Have a $0 Annual Fee

Cards with no annual fee can be ongoing or introductory. Like 0% interest rates, introductory fees end after a certain amount of time, or a particular number of billing cycles.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines.

The Best Business Credit Card for Your Business Can Even Appeal to Your Social Conscience

Some business credit cards allow for donations to social causes. These donations are often in the form of points. American Express has its own program, Just Giving. MasterCard allows for charitable giving via its personal credit cards. This is through a program called Charity Charge.

Bad Credit/Fair Credit/Average Credit Business Credit Cards

There are some business cards which will accept less than stellar personal credit. But you will often need to assure the card issuer of repayment in some other fashion. . This may involve giving the provider access to your books so they can assess your cash flow. Or the provider might set up a frequent (as in daily) electronic withdrawal from your account. This is so you don’t get behind in payments.

Balance Transfers

Many cards allow for balance transfers. You may have to pay an annual percentage rate for transfers. And, like with APRs for purchases, the APR for balance transfers may have an introductory rate. Or you may have to pay a flat rate, often a minimum.

Travel

Travel rewards are usually in the form of miles rather than points. Rewards may tie to a particular airline or hotel chain. Travel rewards may also come in the form of discounts on car rentals. They may even come in the form of added miles for filling up using certain gasoline brands.

Points

These are points which come from an activity other than travel. A card issuer might offer multiple points per dollar spent, for spending within a particular category, such as internet shopping. Some cards offer differing multiples depending upon category of choice.

Cash Back

Cash back usually comes in the form of a low percentage rebate, such as 1%. Some card issuers offer unlimited cash back. Others offer bonus amounts for chosen category spending or meeting a certain spending minimum within a particular amount of time after account opening. Such as $750 if you spend $7,500 in the first three months after account opening.

The Best Business Credit Card for Your Business Might Have a Great Rewards Program

Rewards can take the form of rebates or statement credits or other perks. Some cards offer a reward in the form of free TSA PreCheck®, which currently costs $85. Other such perks may include waiving a first late payment fee or a free cell phone protection plan.

Statement Credits/Monetary Bonuses

Statement credits are payments toward your credit bill. They tend to be one time only. They often tie to a minimum spent amount, within a time after account opening. Bonuses are slightly different. With bonuses, it’s a monetary reward not paid toward your credit balance.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines.

High Limits

In general, higher limit credit cards tie to better credit scores. They may come with substantial annual fees. Higher fees can incur all along or after an introductory period. Cardholders should pay particular attention to annual percentage rates. Annual percentage rates will matter more when your limit is $250,000 rather than $25,000.

Unique Benefits

Unique benefits do not fit under any other categories. Cards may only be available to a certain type of person like members of the armed forces. Or a card may enroll you in some sort of benefits program. Still others may offer certain purchase discounts.

The Best Business Credit Card for Your Business: Takeaways

Business credit cards come in several forms like secured or debit. And they offer certain features, like low APRs or high limits. With good business credit scores, you’ll have your choice of benefits and features. There are several different types of business credit cards and various benefits. And there are special characteristics for unique cards.

The post Some Straight Talk on How to Get The Best Business Credit Card for YOUR Business appeared first on Credit Suite.

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The Top 3 Secured Business Credit Cards

Got Bad Personal Credit or No Business Credit? Secured Business Credit Cards Could be the Answer You’re Looking For

But be aware of what secured business credit cards really are – and what’s a much better alternative to kickstarting a business credit profile.

What Are Secured Business Credit Cards?

Secured business credit cards are for businesses with no credit or a less than perfect credit history. An initial security deposit is necessary. This deposit establishes your card’s credit limit. Often a minimum deposit of $500 is necessary. Once you start making purchases you get invoices like a regular credit card. But this begs the question: what does it mean when a business credit card is unsecured?

Unsecured Business Credit Cards

An unsecured business credit card works like an unsecured consumer credit card. Credit limits are calculated from many factors, this depends on the card issuer. Factors in deciding credit limit can include personal credit and/or your company’s business credit scores. They can also include time in business, annual revenues, etc. These credit cards can give your business the opportunity to earn incentives and rewards.

What Aren’t Secured Business Credit Cards?

There are a number of types of business credit cards. Some aren’t too different from secured cards. Or they may have some of the same results, where you can get credit when you normally couldn’t, and you may even have the opportunity to build business credit with such cards.

Prepaid Business Credit Cards

A prepaid business card works as a convenient alternative to carrying cash. In this way, it works a lot like a secured credit card. You add funds to your account. And then whatever amount you add is available for purchases. Sounds like a debit card, right?

Business Debit Cards

But, a business debit card is a card that works a lot like a business checkbook. The limit is the amount of funds you currently have in your business checking account. Every time you use it to make a purchase, the amount you charge comes from your account as a deduction

The Difference Between Prepaid and Debit Cards

Prepaid cards and debit cards are both widely accepted at merchants worldwide, but one is preloaded and the other is not. Debit cards are linked to a checking account, while prepaid cards aren’t and instead require you to load money onto the card

Prepaid Cards Versus Secured Credit Cards for Business

Not exactly. The salient difference between secured credit cards and prepaid debit cards has to do with whose money you’re spending when you use the card. With secured credit cards, you spend money borrowed from the credit card company. You pay that money back after the purchase. With prepaid debit cards, you’re spending your (or your business’s) own money. You load money onto the card before the purchase.

Because it involves borrowing and repaying money, a secured credit card can help someone (or a business) build their credit. It can also harm their credit if they don’t use the card responsibly. Prepaid debit cards have no effect on a credit score.

Business Charge Cards

Another, similar-sounding card is a business charge card. A business charge card has all the convenience of a credit card. But it’s without the high price of interest. When using this card you must pay your balance in full each billing cycle.

Since you can’t carry a balance, a charge card doesn’t have a periodic or annual percentage rate. Hence there is no rate for a charge card issuer to disclose. Let’s look at some secured cards for business.

FNBO Business Edition® Secured Visa® Card

With this card, you can, “take control of your credit history and help rebuild your credit”. Request your own credit limit between $2,000 and $100,000, in multiples of $50, when you apply. Your credit limit is subject to credit approval and a security deposit.

Your security deposit is 110% of the amount of your credit limit. And you will earn interest on your security deposit. But there is a $39 annual fee. Pay a variable 20.24% APR on purchases and balance transfers based on the Prime Rate.

Get it here: https://www.fnbo.com/small-business/credit-cards/ 

Union Bank® Business Secured Visa® Credit Card

With this card, you can, “start building credit for your business”. Get up to a $25,000 secured credit limit. You will pay a 13.99% variable APR on purchases and balance transfers. And pay a 5% balance transfer fee on each transfer, with a minimum of $10.

There is a 25.25% APR for cash advances. And there is a $30 annual fee. Also, Union Bank will demand immediate payment in full, if you use this business credit card for personal, family, or household purposes.

Get it here: https://www.unionbank.com/business/visa-credit-cards-all 

Score the best business credit cards for your business. Check out our professional research.

Wells Fargo Business Secured Credit Card

A Wells Fargo business checking or savings account must be open before applying. Upon approval, your funds will be transferred from the deposit account to fund the credit line

Get a $500 to $25,000 credit line, based on the amount of funds deposited by you as security in a collateral account. Pay no annual fee, and no foreign transaction fee.

You can get up to 10 employee cards. Pay prime + 11.90% APR on purchases. And pay prime + 20.74% APR on cash advances. Cash advance or balance transfer fees may apply.

Perks

Choose between Cash Back or Rewards Points. There is no annual rewards program fee. And there are no required spending categories or caps. Earn 1.5% cash back for every $1 spent on net purchases. You can receive cash back automatically as a credit to your account or to your eligible checking or savings account each quarter.

If you choose rewards points, you will earn 1 point for every $1 spent on net purchases. Get 1,000 bonus points when your company spends $1,000 or more in any monthly billing period. Redeem points for gift cards, merchandise, airline tickets and more. Get a 10% points credit when you redeem points online. And you can earn extra bonus points or discounts from Earn More Mall® retailers.

Business Credit Building with the Wells Fargo Business Secured Credit Card

Wells Fargo reports your payment and usage behavior to the Small Business Financial Exchange. Payment and usage activity of the Wells Fargo Business Secured card is not reported to the consumer credit bureaus, therefore it will not help build or rebuild personal credit history. 

Wells Fargo will periodically review your account and recent credit history for an opportunity to upgrade to an unsecured business credit card. You may become eligible with responsible use over time. Being able to upgrade to an unsecured business credit card also depends on your FICO score, payment history and ratio of credit card usage to credit limit.

Get it here: https://www.wellsfargo.com/biz/business-credit/credit-cards/secured-card/ 

Score the best business credit cards for your business. Check out our professional research.

Choosing the Best Secured Business Credit Cards for Your Circumstances

Wells Fargo is the best when it comes to annual fees (it’s hard to beat $0). For the highest possible credit limit, the FNBO Business Edition® Secured Visa® Card comes out on top,

 with a $100,000 maximum.

For the best balance transfer rate, it looks like Union Bank® Business Secured Visa® Credit Card is the best. But keep in mind, they do charge a 5% balance transfer fee on each transfer,

 with a minimum of $10.

Building Business Credit is a Viable Alternative to Getting Secured Credit Cards for Business

New businesses can get credit from starter vendors, and often there’s no need to pay money to secure a card. Consider CEO Creative and Grainger Industrial Supply. Neither of them require a deposit to secure a card.

Supply Works

Let’s focus on another starter vendor: Supply Works. They are a part of Home Depot, and offer integrated facility maintenance supplies. But they will not accept virtual addresses. They will report to Experian. Terms are Net 30. You can apply online or over the phone. 

Qualifying for Supply Works

You will need:

  • An entity in good standing with Secretary of State
  • EIN number with IRS
  • Business address (matching everywhere)
  • D-U-N-S number
  • Business License (if applicable)
  • Business Bank account
  • Trade/Bank references

But at least there is no minimal time in business requirement.

Score the best business credit cards for your business. Check out our professional research.

Secured Business Credit Cards: Takeaways

For entrepreneurs just starting out, getting secured business credit cards may seem to be one of the only ways they feel they can get credit. But you can build business credit with starter vendors. Even if you start with lower limits, you often don’t have to secure those cards with a deposit. As a result, starter vendor credit is nearly always a superior alternative to getting secured business credit cards.

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