This is the exact same thought process that goes behind the decision to obtain a business credit card. With all the benefits and signup bonuses that business owners seem to be offered surely your home run cupcake shop wouldn’t be eligible?
There is a common misconception that you need to own a large incorporated business in order to be eligible for a business credit card. Although there are some banks out there that do have stricter eligibility requirement, most are flexible and will provide smaller businesses with one. If you are running a business such as an EBay business, then you will most probably not be a registered business. In this case, you will be required to fill in your name instead of the company name and your social security number in lieu of the EIN.
When you apply for a business credit card for the first time, your FICO score may go down by 2-5 points. Beyond this point however, your identity will be regarded as separate from the identity of the business. In this volatile economy, where finances are highly unpredictable it’s best to opt for a business credit card. This will make sure that your personal score doesn’t suffer a hit in case of non-payment or late payments on your business card, especially if you’re dealing in large balances.
This is perhaps one of the most important benefits of keeping a business credit card. When you’re a small business owner, it is very easy for the line between personal and business expenses to get blurred. A business credit card will make sure that all personal and professional accounts are kept separate and you don’t find yourself paying from your personal account for business payments. This also makes tracking and managing expenses easy and is a complete luxury when doing your taxes.
This also makes account assessment easier at the time of audit, since all your information is already collected in one place, rather than having to decipher which accounts were personal and which were corporate.
The variety of business credit cards available today allows business owners to deal with lenders on their own terms. The choice of business card depends upon the type of business that you run. If you have a travel-intensive business, then you can opt for one that offer miles on sign up or as points. Additionally, there are credit cards that provide discounts in exchange for accumulated points at certain outlets. This can come in handy when buying stationery or raw material.
Business credit cards are in fact great for small businesses since they allow the owner to withdraw as much as they need without applying for a large loan. Additionally, the revolving credit means that you can access funds as and when you need them without the need for a reapplication.