4 smart ways to use a business credit card

Businesses are always looking for ways to maximise efficiency, as well as cut costs and earn a little extra where they can. Well, having the right business credit card can check all those boxes and then some.

More than just a convenient way to pay, the best business credit cards act as smart financial resources packed with perks. From earning lucrative rewards to helping manage cash flow, these small pieces of plastic can work wonders for your bottom line when implemented the right way.

But if you’re not taking full advantage, there’s a possibility that you could be leaving money on the table. With that in mind, here are four ways every business owner can use their credit card. 

1. Earn cashback rewards on every business purchase 

This one’s a no-brainer for most. Why wouldn’t you want to get paid back for expenses you’re already making? A quality cashback business credit card will credit you a percentage of money for every pound you spend, essentially rewarding your entrepreneurial spending habits.

For example, the Funding Circle Cashback credit card offers an unlimited 1% cashback on all purchases after an intro period of 2% cashback for the first six months, up to £2,000. Use it for anything from inventory to subscriptions to travel—you name it. Your cashback balance keeps growing with every use.

Over time, that cashback adds up to a tidy sum you can reinvest back into your business. It’s money you’ve already spent being returned to your revenue stream.

2. Consolidate expenses for simplified accounting 

Dealing with a dozen different payment methods for vendors, suppliers, subscriptions and other expenses is often a bookkeeping headache. It’s far easier to consolidate as many of those outgoing payments as possible onto one card.

Having a single statement that itemises all your monthly business expenses means less time wrangling receipts and outstanding payables. You can clearly see where everything you spent went, making the likes of accounting cycles, tax filing, budgeting and reporting a much smoother process.

Some business credit cards also integrate directly with popular accounting software, making expense tracking almost automatic. The simplified record-keeping alone is worth putting more expenses on plastic.

3. More financing flexibility for larger expenses

A line of credit product provides even more financing flexibility than just the interest-free grace period. These offerings tend to let you cover any large business expense upfront using the credit line. Then, you choose repayment terms that fit your cash flow — pay over several months at a fixed fee instead of interest charges, or settle the balance in full if you prefer, just like with our FlexiPay line of credit, which comes with a handy Visa card.

Whether making bulk inventory purchases for supplier discounts, commissioning equipment upgrades or paying for professional services, this versatile financing helps you to invest without cash constraints. Secure the funds now, and repayment accommodates your schedule. Look at it as cash flow control for driving operational growth.

4. Access emergency funds and build business credit 

Even the most responsible business can experience unexpected cash crunches. That’s when your credit card’s pre-approved revolving credit acts as a convenient emergency fund to fall back on.

While carrying a balance and incurring interest fees isn’t ideal, establishing good credit behaviour like making on-time payments can build your business credit profile over time. This not only keeps those credit lines open, but can help improve your company’s overall creditworthiness for things like loans and other financing down the road.

Of course, the healthiest approach is paying balances in full each billing cycle to avoid interest. But tapping that source of funding during lean times sure beats maxing out personal finances or being forced into high-interest loans.

Using Funding Circle to do business

Using a business credit card for more than just secure purchases can act as a smart financial move. From earning cashback to maximising interest-free float periods and building business credit, a little strategic spending can yield some lucrative returns.

If you’re looking for a flexible and rewarding credit solution, the Funding Circle Cashback business credit card checks all the boxes. Earn 2% cashback on all purchases for the first six months up to £2,000 cashback – then get 1% cashback with no caps after that.

Or consider FlexiPay, our line of credit designed to help you take control of cash flow with repayment schedules over 1, 3, 6, 9 or 12 months and one simple fee per transaction.

Managing finances is hard enough. So why wouldn’t you want your business purchases to pay you back or give you the flexibility to run it on your terms?

28/08/24: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.