What You Need to Know about Using Unsecured Credit Cards for Small Business Expenses

Running a small business is a lot of work, and there is always an expense. Although some of those expenses can be delayed or paid for creatively, many of them need attention immediately to prevent foreclosure on your company or worse. Whether you need extra money for improvements, inventory, expansions or otherwise, it’s important to consider your funding options. As a small business owner, it’s your responsibility to find the money.

Entrepreneurs value every dollar they make. The right unsecured credit cards can that money go farther. When you apply and are approved for fast business credit, it’s much easier to get the job done in a timely and cost-effective manner without incurring steep penalties or slumps in your sales. So, how do you get credit cards for small business expenses without getting in over your head?

Why Getting Unsecured Credit Cards Is Wise

Using a source of revolving credit to finance your small business is an extremely wise choice. By getting a small business credit card, you can fund your company’s expenses while also improving your corporate creditworthiness. Unlike secured lines of credit, unsecured credit loans give you more repayment flexibility and require little to no collateral. With the right unsecured credit card offers, it’s possible that you’ll receive money-saving rewards and cash-back bonuses on prespecified purchases as well.

TIP: To make the most of the unsecured credit loans or cards you use, be sure to pick one that offers rewards for the things you buy the most: office supplies, travel expenses, rental cars, vendor-supplied inventories, hotel stays, business luncheons, etc. You should be able to find that information within the Terms and Conditions of each card.

Furthermore, small business credit cards are designed to help keep your business and personal credit reports separated. In fact, some unsecured credit cards for businesses offer additional features that the typical consumer is not privy to. For example, the right credit card provider may give cardholders a handful of authorized user cards at no extra charge. In addition, those preauthorized cards often include features such as credit line alerts, spending limits, and boosted fraud protection, not to mention other benefits to the cardholder such as airport lounge access, frequently increased credit limits, and purchase protection.

TIP: If you pay your unsecured credit card statement balance in full each month, you’re more likely to receive extra rewards for your spending that can translate to money in your pocket. Those rewards often include thing like airline miles, hotel points, and even cash-back bonuses.

How to Use Your Unsecured Credit Cards for Small Business Expenses

Using unsecured credit cards to fund your small business expenses is a good idea as long as you use your cards correctly. Just like personal credit card users, business owners may have several good reasons to use more than one card. As a small business owner, you may want to use a specific card for certain purchases to redeem the rewards offered while using another card for other purchases to redeem those rewards. Having options is a great way to maximize your card’s benefits.

In addition to utilizing your unsecured credit card benefits wisely, it’s also important to take advantage of any introductory rates or promotional offers given by the provider. Some of the best unsecured credit cards for small businesses give lowered interest rates and other promotions that can be quite helpful in times when your company needs to carry a balance. As a small business owner and unsecured credit loans user, you should do your best to choose the unsecured credit card offers that best suit your company’s objectives.

As a general rule, try to avoid paying for features you don’t actually use. For example, many credit cards for small businesses offer low annual fees in exchange for boosted travel benefits to the cardholder. Typically, those card options require an annual fee of only about $100 or so. However, there are numerous unsecured credit card offers that require zero annual fees but don’t offer travel bonuses. Those options are more suitable for business owners who don’t typically use airlines, hotels, and rental cars. In short, travel rewards business credit cards have higher interest rates than similar cards, but those lower interest rates usually translate into fewer rewards.

Little Known Facts about Using Fast Business Credit

While unsecured credit loans can help you get fast business credit, it’s imperative that you understand the finer points of card utilization. Although business credit cards can help keep your business and personal expenses separated, there are a few loopholes you should know about. For instance:

• If you happen to be the sole proprietor of your small business, there are a few other considerations to make before accepting or using any unsecured credit card offers. Each statement from the card provider will get reported to the three major consumer credit bureaus as personal debt.

• As the sole proprietor, any balance you carry, even if you pay your bill in full each month, can affect your personal credit rating. However, that is not how it works for small businesses that have been incorporated. Keep that in mind when opening an unsecured credit card for small business expenses.

• Small business credit cards are opened using the credit profile of the primary card holder, so only apply for one if your credit rating has been optimized beforehand. In general, use the same considerations you would use when applying for a personal loan. This will help you secure the lowest interest rates, the best rewards, and the most beneficial repayment terms.

• Applying for several unsecured credit cards at once is usually a bad idea, even if you need fast business credit. Not only does it increase the number of hard inquiries on your report, but it also decreases your chances of being approved for loans and other lines of credit as a consumer.

• If you plan to incorporate your small business anytime soon, try to avoid accepting any unsecured credit card offers until you have received an employee identification number (EIN) from the IRS. Sole proprietors simply use their social security number (SSN), but the fact that their personal credit report is pulled should be taken into consideration.

Credit cards for small business expenses can help tremendously. Getting unsecured loans fast is certainly possible, but you need to make your moves carefully and cautiously while having the best personal credit profile possible. If you need help positioning yourself or your business to receive the best unsecured credit card offers, consult with a team of professionals who know how to make your credit report shine.

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