How to Qualify For a Business Credit Card

In the past, we’ve mostly focused on consumer credit: what credit is made up of, how to better your score, and the ins and outs of credit repair. Something we haven’t really touched on, which I’m so excited to discuss with you all, is business credit! Most of you are on your journey towards better financial health and hopefully are saving money in order to achieve certain goals such as purchasing a home, leasing or financing a new car, or maybe even planning a dream vacation. Some of you may also be aspiring to own your own business someday and the reality is, most of us don’t have tens of thousands of dollars at our disposal to invest in a business right now. This is where business credit comes in.

You may be thinking that applying for a business credit card can be difficult or that you may not qualify, especially if you just opened your business. We’re going to be talking about the 10 things that you need in order to qualify for a business credit card!

1. A Personal Credit Score
This is where all of your hard work to improve your personal credit score will pay off! Yes, a business credit card is for you business, however, credit card issuers will still run your personal credit as part of the application process. The better your credit score, the better your chances of getting approved for a good credit card.

2. A Personal Guarantee
In the event that your business cannot pay the debt on the credit card, you will be financially responsible for paying. This is part of the reason why credit card issues need to run your credit. As you already know with personal credit cards, if you don’t pay the debt on your business credit card, your personal credit score will suffer!

3. Your Business’ Legal Name
You will have to include your business name in the application, which will be included on the front of the credit card. Unless you’re a sole proprietor or general partner, then you would just use your legal name. In order to qualify for a business credit card, your business needs to be for-profit, which means you either get a 1099 tax form or earn income for selling products or performing a service.

4. Contact Information
You will be required to provide the contact information for your business, which includes the phone number and mailing address. If your business is based out of your home, you can usually copy over the information from your personal information.

5. Industry Type
You will have a variety of industries to choose from, and you may even see sub-industries in your application to help narrow down your specific type of business. Pick the one that represents your business the most if you don’t find your exact industry listed.

6. The Structure of your Business
When it comes to the structure of your business, credit card issuers need to know if you have a corporation, LLC, or are a sole proprietor. There’s a possibility that additional information will be requested from you if you have a corporation or partnership. If the business is directly or indirectly owned by other owners, who own at least 25%, you may need to provide their information as well, so make sure that you have that on hand!

7. Tax Identification Number
Your business will have an EIN, or Employee Identification Number, unless it’s a sole proprietorship. In that case, you would only include your personal social security number. Either way, you’ll still have to provide your social security number. Remember, the credit card issuer has to run your credit because you are providing a personal guarantee on the account!

8. Expenses and Business Revenue
You will be required to provide information on your financials, in order for the credit card issuer to know how likely you are to pay back the debt. By knowing the business’ revenue and expenses, the credit issuer can better determine your credit limit. Don’t be scared if your business hasn’t started making any money yet, or doesn’t make much, you can just provide your annual personal income.

9. Additional Business Information
How many employees do you currently have? How long has your company been in business? These questions will be asked as well!

10. Your Role in the Company
In order to apply for a credit card in the business’ name, you need to have authority to do so. You will be asked what your role in the company is. For example, the owner, general manager, or president.

Don’t be discouraged if you are planning on opening a business and think that you may not be approved for a business credit card. A business credit card is not the same as a business loan or line of credit, but it should be able to help you take care of some expenses! Make sure you apply for a card that’s targeted for your credit score range and have this information ready!