Applying for a Small Business Credit Card? Read This First

Increase your odds of approval by following these simple rules.
Last updated Dec 21, 2020 | By Brandon Neth
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You want to start out on the right foot when applying for a business credit card, especially if you're a new business. After all, you want to establish a long relationship with the card issuer, but you could also probably use the cash flow right now too. 

By understanding what the card issuer is looking for on the application and answering their questions the right way — the first time — you're more likely to avoid issues and hopefully get quick approval. Here are some best practices we've discussed as a group in FBZ Elite Travel & Points.

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Business credit card application best practices

1. Get started with your Social Security number

If your business is new and you don't yet have an EIN (an Employer Identification Number issued by the IRS), that's ok. Most card issuers are new business friendly and want you as a client for the long haul. They recognize we all have to start somewhere!

Here's how to handle it on the business credit card application:

  1. Use your Social Security number in place of an EIN.
  2. Select sole proprietorship as the business type.
  3. Use your name (and ONLY your name) for the business name. This is important if the card issuer needs you to verify your business name.
  4. Use your home address for the business address. Try to avoid using a PO Box as these can cause issues.
  5. Since you're a sole proprietor and likely just getting started, it's acceptable to use a portion of your personal income as a revenue source since this may be used to repay debt on the account. This advice is only applicable if you are applying as a sole proprietorship.
  6. You have just one employee - YOU! Keep in mind, you can add additional employees in the future as your business grows. Also, if your spouse or partner wants to get the same card, they can fill out a separate application at a later date. 

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2. Answer the revenue question conservatively

The application will ask you to estimate your annual revenue. Things happen in business, so I like to be conservative with this number. I suggest using only about 50% of what you think you'll actually make per year. If you end up needing to chat with a representative from the card issuer and they ask you to explain how you got your revenue number, it will be easier to justify if it's realistic. And, if they see you're making an effort to be truthful, it could increase their goodwill and maybe (fingers crossed!) help with your approval odds.

3. Play the waiting game

You may not get instantly approved for your business card and instead get a message like "We need more time to review your application." Don't panic! This is very common, especially when applying for a Chase card.

I suggest waiting until you hear back from the card issuer. Usually, you'll hear back within 10-14 business days. Most people I've talked to get approved just by waiting. If you don't get automatically approved, you may get a letter asking you for more information about your business. If you get one of these letters, just respond back with the information requested.

I do not recommend calling the card issuer about your application before you get a response. If you do call, be prepared to answer a lot of questions about your business. (Calling the automated line to check your application status is fine. This won't hurt anything.)

4. Stick with the truth

Never lie on your application or inflate your numbers to look better. You want to build a long term relationship with the issuer. Plus, it's not necessary to have mega revenue and a huge team to get a small business card. So, just be honest, and be yourself.

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5. Space out your applications

It's exciting to be able to apply for business credit cards, but pace yourself. Card issuers look at your credit report when reviewing your application so it's important to understand the issuer's rules for how often you can apply. For example, if you are applying for a Chase business card because you want to earn the valuable Chase Ultimate Rewards, you must fall under 5/24 (you cannot have opened more than five applicable credit cards in the last 24 months) and 1/30 (you cannot have been issued any Chase credit card in the last 30 days.) To be extra safe, I suggest waiting at least 60 days between Chase applications.

You're now ready to apply for a business card

Browse our list of the best business credit cards and select the one that makes the best sense for you. Whether your business is a startup or you've up and running for a while, you'll be able to find the right card for you in this list of credit card offers. Good luck with your business!

FAQs about small business credit cards

What is the easiest business credit card to get?

There are many factors that go into applying — and getting approved — for a business credit card. Your personal creditworthiness and company history may both influence that decision, for instance, making it easier or harder to get the business card you want.

With that said, you might want to check out the Capital One® Spark Classic for Business. This rewards credit card requires only a fair credit score rating, which means you can still get approved even if you’ve defaulted on a loan in the past five years or if you have a limited credit history.

This card is a business card with no annual fee, and it offers employee cards at no additional cost. It also earns you 1% unlimited cash back on every purchase for your business.

What is the best business credit card?

If you’re looking for the best business credit card, you’ll want to find the one that most adequately fits your business’ needs. To do that, you’ll need to look at how and where your business spends money, and determine which card perks would be the most lucrative to have.

For instance, if you’re planning to make a large purchase or need to pay off an existing balance, you may want a card offering a 0% introductory APR on purchases and/or balance transfers for a certain amount of months after account opening. If you travel regularly, you may prefer a card that offers travel rewards and also travel benefits like no foreign transaction fees, annual travel credits, trip delay/cancellation coverage, or airport lounge access.

You might also want to consider your day-to-day business expenses. Many issuers offer free employee cards and the ability to easily manage limits for each, which can be helpful if you’ll have multiple employees with spending privileges.

Lastly, consider whether the card offers cashback rewards, bonus points, or bonus miles on your normal business spending. For instance, if your employees drive a lot and a certain card’s rewards program offers bonus points at gas stations, it could be a good fit for you. Or if you know you'll be spending a lot at office supply stores, then you'll want a card that rewards you for that. 

Compare both earning and redemption options to see which product is the best fit for you and your business, and don't forget to evaluate any available welcome offers too.

Can I get a business credit card with bad credit?

Although having a good credit score will open the door to more credit card products, you absolutely can get a business credit card even if you have bad credit.

Each credit card issuer is different: some may require you to have a healthy business credit history. Some allow you to apply with only your personal credit history. That means that the responsible usage of personal credit cards could help you eventually get a business credit card. Other card issuers may pull your personal credit score in order to approve your application, but then only report to business credit bureaus moving forward.

Depending on your personal and business credit scores, it can be important to find a card with requirements that match your credit history. For instance, some card products require only a fair credit score in order to be considered; others require excellent credit.

Typically, the better your credit, the easier it is to get a new card. And you may find you are only offered a low credit limit if you have a low credit score. However, this doesn’t mean qualifying for a business credit card is totally out of reach just because you have bad credit.

How do I build credit for my LLC?

The first step in building credit for your LLC is obtaining a business tax ID, or EIN (employer identification number), from the IRS. You will also want to obtain a DUNS number by registering through Dun & Bradstreet. Having both is helpful, as some lenders will use your EIN to identify your business when pulling a credit history, whereas others will pull using your DUNS.

In order to build business credit, you’ll also want to open and utilize a dedicated business bank account. Getting a good business credit card and managing it responsibly is a great next step, as is regularly checking and monitoring your score through the three business reporting bureaus (Experian, Equifax, and Dun & Bradstreet).

Lastly, you may want to work with vendors that report your payment history to these three agencies. By making payments on time (or even early), you can grow your business’ Paydex score and, in doing so, open the door to a new lender or trade line of credit.

As with a personal credit history, it can take both time and dedicated effort to build credit for your business. Luckily, you may be able to rely upon your personal credit until your business has had the chance to grow a healthy credit history.

Can I get business credit cards for my employees?

Most business credit products allow cardholders to request cards for authorized employees, who can then use the card to make business purchases according to set spending limits. Depending on the credit card, these additional cards may be free or you may be charged an additional annual fee for each.

These business credit card accounts treat employees as authorized users. Although employees spend individually, the company is responsible for charges at the end of the day.

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