Applying for your first business credit card is nerve-wracking. First, you have to find the best small business credit cards for your needs. It can be hard enough for any business owner to find the right credit card for business when they have already used up the full amount of their VA loan. But for first time business owners with no business credit history, it can be especially difficult. Find out below how to get approved for a small business credit card with no existing business credit.
Consider Secured Options
If you want to be certain you will get approved for a business credit card, apply for a secured credit card. Secured credit cards are easy for business owners with no credit history to obtain. Secured credit cards require you to have money to borrow against, however. If you have a credit limit of $500, you are required to put down a security deposit of the same amount. This is a great way to build credit history for business purposes. You are sure to get approved for secured business credit cards. Make sure to consider them in your search for business funding.
Use Personal Credit
If you have a good personal credit score and limited funds, you can borrow using that instead of your non-existent business credit score. Using your personal credit score does come with risks. If you are unable to pay back your small business credit card debt, you will personally be responsible for it, not your business. But, getting a business credit card using a personal credit score helps you get approved for your first business credit card. Otherwise, it would be near impossible. Just be sure to continue making payments on time throughout the time you have the card. This is one of the most convenient ways for entrepreneurs with good credit scores to secure their first small business credit card.
Talk To Your Landlord
If you rent an office space or other business location, ask your landlord to sign up for a service that reports to credit bureaus. There are several services out their that can allow your landlord to report your rent payments to the credit bureaus. That means that every month you pay the rent on time, you are establishing business credit history. This is a useful way to increase your odds at getting approved for business credit cards. If you can request that your landlord start reporting monthly rent payments to the three major credit bureaus, definitely do it before applying for a small business credit card for the first time.
Talk To Vendors
See if you can talk to your vendors about also reporting your business lines of credit to the credit reporting agencies. Once you have established a line of business credit with vendors, you may be able to put off applying for a credit card for your business. Then, you can wait a couple months to allow the vendor to report to the credit bureaus about your timely payment history. This will help you establish business credit. That way, you will have a decent credit score when you apply for your first business credit card.
Find A Partner
If you have business partners with great personal credit scores, you can partner with them to get a small business credit card without credit. Of course, they have to be willing to do it. Some partial business owners may not want to put their personal finances on the line just to fund the business’s accounts payable. If they are willing, make sure to take advantage of this. You can piggyback off of their great credit rating to secure the best small business credit cards with low interest rates.
If you are a first time business owner looking to find the best small business credit card to fund your startup, it can be near impossible. Your business has no credit history, so few lenders will be willing to extend credit to someone with no credit history. Thankfully, there are ways to get around this road block, detailed above. Consider these strategies to help you establish business credit and get approved for the top business credit cards available in no time at all.