When you decide to start a small business, you find out
pretty quickly that it takes more than skills and dedication in
your respective area of work. Besides being good at what you
want to do, you also need to known your accounting and financing
issues, no matter how annoying and boring these may be. And the
credit card problem for small businesses needs careful handling,
just like that of a regular, personal credit card.
Choosing the right type of credit card is vital for the
success of a small business. Even if you don't have access to a
corporate credit card, a small business card can be a major tool
on the path to success. When you apply for a small business
credit card, lenders will analyze your request from a variety of
points of views. While their evaluation of the risk may vary
according to various local factors, they will all take into
account the "five Cs": capital, capacity to make the payments,
collateral, conditions and character.
Capital, meaning your personal investment in the business,
outlines not only the size of the business, but also how much
risk you are willing to take. Balance risks carefully - too much
means you will be rated reckless, too little, and the lenders
may think you are not serious about this. The capacity to repay
the loan is, of course, critical for the lender and will be
carefully analyzed. The collateral or the guarantees will show
that you have a backup plan for returning the loan, in case
things go wrong. The conditions represent the general situation
in your geographical area and your respective line of business -
mostly things that you cannot control (but you can make them
look better in carefully planned business plan). Last but not
least, character is the impression you make on the lenders - how
trustworthy and business-oriented you appear to them.
If you take all these into account, your application is more
likely to be successful right from the start. Of course, you
also need to consider, carefully, which type of business card
suits your needs.
Many small businesses rely on cash flow to pay for suppliers
or contractors, because they need to purchase materials and
services before their own clients pay up. You need to calculate
the difference between the date when you purchase the materials
and the date when the clients pay you back. If this is shorter
than 30 days, go for a card that doesn't charge you interest for
the respective period. If it is two, three months or longer, go
for a low interest card.
Also, you should think of how often you will have to travel
for business-related purposes, and how a special type of credit
card can help you with this, or how you will handle unprepared
emergency situations that hustle small businesses constantly.
Some of the offers for credit cards for small business
include Blue for Business Card - no annual fee, 0% intro APR for
the first 9 months, credit line of up to $50,000 or Blue Cash
for Business Credit Card - up to 5% cash rebate, no annual fee,
0% APR for up to 15 months. Advanta Platinum with Rewards,
featuring cash back bonus, offers 0% intro APR for balance
transfers, up to 50,000 credit line and various types of rewards
for the things you buy most often (gas, office supplies and so
on), bonus miles or cash back.
The CitiBusiness card has 0% APR for purchases for the first
6 months, no annual fee, a generous credit line and additional
cards for the employees, with a credit limit set by you. The
Platinum Business Credit Card from American Express has no
annual fee and 0% APR for the first nine months on purchases and
balance transfers.
Other options include Business Green Rewards Cash - no fees
for the first year and no pre-set spending limit, and the
Business Cash Rebate from OPEN: the Small Business Network, with
up to 5% cash rebate, no annual fee, 0% APR for the first six
months, no limit for cash back and no minimum spending
requirements.
