5 reasons to apply for a small business credit card

As a small business owner, you might think business credit cards are only for the big players. Companies with vast and complex financial needs.

But the truth is, they can be beneficial for businesses of all sizes, whether you’re a sole trader or manage multiple employees. 

Arguably, the biggest benefit of a business credit card is having instant access to capital. This is particularly important for new or smaller companies that may not qualify for traditional financing options such as bank loans.

However, credit cards for business offer a number of other upsides. Here are 5 top reasons why your business needs a credit card…

1. Cash flow management

No matter what industry you’re in or the size of your business, having a steady cash flow is crucial if you want to survive and grow. 

Business credit cards serve as a financial safety net. They allow you to handle big-ticket expenses or essential costs without having to worry about draining your cash reserves. 

From buying stock, to paying for professional services, to covering rent or bills, credit cards provide much-sought after flexibility when it comes to managing your business finances.

2. Business emergency funds

In a business emergency, having quick access to funds can be make or break. 

A business credit card provides an instant line of credit to cover anything from equipment repairs, to last minute travel expenses or unexpected bills. It can be a crucial tool to keep your business up and running in all situations. 

3. Business credit score

Similar to your personal credit score, having a solid business credit score is important. 

• It makes it easier for you to secure loans and lines of credit, often with more favourable terms and lower interest rates. 
• It can help during negotiations with suppliers who may be more willing to offer longer and more attractive payment terms. 
• It can enhance your reputation as a financially stable business with customers, partners and investors. 

Having a business credit card and paying your bills on time can be an effective way of building your business credit score, while keeping your personal credit score separate and protected. 

4. Higher credit limits 

Running a business is expensive. There are essential costs such as accounting fees, legal bills, inventory, rent, utilities and taxes. Then there are non-essential – but still important – outgoings such as travel, client entertainment and training costs. 

While you could use your personal credit card to cover these expenses, your credit limit may hold you back. Business credit cards typically offer higher credit limits, providing greater flexibility for handling big ticket purchases or large expenses. 

5. Professionalism and credibility 

Having a dedicated business credit card is a great way of showcasing your professionalism to both internal and external stakeholders. By separating your business and personal finances, you’re showing you take your business seriously and are fully committed.

In short, a business credit card tells employees, customers, clients, partners and investors that you’re credible, legitimate and in it for the long haul.

Want a business credit card with ultimate flexibility and 0% interest? 

Every business owner wants flexibility and transparency when it comes to their finances. That’s why we launched FlexiPay, a rolling line of credit and business credit card. You can use it to pay business expenses, bills, purchases, and more, then repay over 1, 3, 6, 9 or 12 instalments for no interest – just a flat fee. 

If FlexiPay sounds like it could be a good addition to your business, check your eligibility in just 30 seconds here. 

22/08/24: 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.