If you’re a business owner and want to know how to get a business credit card, you’ve come to the right place. Building business credit is not easy, and it takes time. But, it’s not impossible if you’re determined to earn your own card. You don’t have to have a formal business structure in order to apply – you can be an unincorporated sole proprietor, or even apply with a personal guarantee.
Building business credit is a time-consuming process
If you are starting a new business, you probably do not have the time to worry about building business credit. This is because this process takes time. While it is true that you must pay off all creditors on time, your credit history is the most important factor in determining your business credit score. A low credit score is the number one reason why businesses are denied credit. To improve your score, you can apply for a secured business credit card.
To begin building business credit, you will need to establish a business entity and a working business credit file. Get a business bank account and phone number. You can choose any business structure you want, but a more formal business structure will help verify your business’ legitimacy. Establishing a business bank account is the first step toward establishing business credit. Establishing a business phone number is another way to demonstrate your responsibility to creditors.
You don’t need a formal business structure
Getting a business credit card is easier than you might think. While a business credit card requires a separate tax identification number (EIN), you can apply for a business card as a sole proprietor and use your social security number. While you may not need to have a formal business structure to get a business card, it is a good idea to have this number.
A business credit card will help you build your company’s credit, and will give you a means of accessing working capital. This can be especially helpful for a small business, which may not be able to obtain a traditional loan due to the long application process or high interest rates. It will be easier to build a credit history with a business credit card and avoid the hassle of applying for a traditional loan.
You can apply as an unincorporated sole-proprietor
If you own a business, you can apply for a business credit card as an unincorporated sole-proprieter. These cards do not require an office or a certain number of employees. You can even apply as an unincorporated sole-proprietor if you do not have an incorporated business. A business credit card is designed for businesses that are owned by a single person or a married couple.
A business credit card requires personal identifying information from you, the business owner, or a co-owner. You will need your EIN to establish your business’s identity and keep your personal and business finances separate. If you are self-employed, you can use your social security number instead. You can also substitute your federal employee identification number for your social security number. You should be sure to consult with your accountant or attorney before making a business credit card application.
You can apply with a personal guarantee
Business credit cards that require a personal guarantee are common for small business owners. This means that you personally agree to repay the credit card balance if your business fails to make payments. A personal guarantee is an important safety net for issuers, as the failure of the business may show up on your personal credit report. In this article, we’ll explain why business credit cards with a personal guarantee are still possible.
Business credit cards without a personal guarantee require a history of successful debt payments and some proof that your business makes a steady profit. They also require reports from several business credit bureaus to assess your ability to pay vendors and the bank. Many companies use Dun & Bradstreet to rate your ability to pay debts. The company will look at your business’s financial history and your personal credit history.