Starting a business is a challenging and exciting journey, and having the right tools and resources can make a big difference in a startup’s success. One such tool is a business credit card, which can help finance the operation and growth of a business.
Corporate cards can:
Below are answers to questions new business owners typically have, whether they’re adopting their first corporate card or switching to the best card to meet the specific business needs of their organization.
A business credit card is specifically designed for business owners and their employees. These cards are typically on the same credit card networks as personal credit cards — Visa, Mastercard, American Express (Amex), or Discover — but they offer unique benefits suited to businesses.
A business card can:
As entrepreneurs grow their businesses, the number of transactions is bound to increase alongside the company headcount. With the right partnership in place, companies can issue employee cards, which enables multiple cardholders to spend on behalf of the company.
Anyone who operates a business can apply for a business credit card. The four common business structures are:
New business owners often struggle to keep track of business spending and to separate personal finances from business purchases. The main advantage of a small business credit card is to get a handle on a startup business’ cash flow.
But corporate cards come with many other perks:
Other credit card offers are also worth considering, such as:
Other competitive perks may include extended warranty policies/purchase protection, insurance offers, and more.
It’s not surprising that terms apply to all business credit cards and corporate cards. Make sure you read the fine print and understand exactly what the business is signing up for.
Pay attention to:
It’s also important to note that it is ultimately the business owner’s responsibility to pay back the balance on a business credit card.
In the same way that an individual builds personal credit based on their personal finance history, a business builds business credit based on its financial history.
Information on financial activities conducted through your business — opening a bank account, getting a credit card, paying suppliers — becomes part of the business credit history and is reported to credit bureaus that deal specifically with businesses.
Any credit that has been extended to your business — credit cards, loans, lines of credit, etc. — contributes to your business credit score. These scores typically range from 1 to 100, with a higher score indicating that the business is creditworthy.
Business credit is tied to an employer identification number, whereas personal credit is tied to a Social Security number. However, it is important to note that any negative information — such as a missed payment or an overall bad credit score — can damage a business owners’ personal credit score.
Building business credit takes time, but a dedicated business credit card can help build excellent credit if the business owner or finance team:
Each swipe at a gas station, purchase at an office supply store, or recurring payment for phone services can help a business on its path to a good credit score, provided the business is using the card responsibly.
Each credit card issuer has its own requirements for the account opening process. Some of the typical requirements providers ask for are listed below.
According to the U.S. Small Business Administration, poor credit history is one of the main reasons why loan applications for small businesses are often declined.
For businesses that do not have an established credit history, most lenders will look at the business owner’s personal credit history to decide on creditworthiness.
In addition to qualifying for the card, applicants may be required to provide a personal guarantee that ensures the business owner is personally responsible for paying back any charges to the card.
Put simply, the best card for a startup is the one that will offer the business value today and grow with the company.
One of the best business credit cards on the market is Navan, an all-in-one travel, corporate card, and expense management solution.
It saves small businesses time and money by:
“If we can put it on the Navan card, we will,” said Shellie Roanhaus, executive assistant to the CEO of Premier Talent Partners. “We want that 1% back on all of our spend, including monthly bills, utilities, and advertising costs.”
The company saved 11% on all travel bookings and received more than $10,000 back from the Navan corporate card rebate in a single year.
Best of all: Navan can help your business grow with quick approvals and no personal credit check. Get started for free in as few as five minutes.