How a business credit card can help brick and mortar stores

According to reports, brick-and-mortar sales will make up a substantial 85% of total retail sales in 2024. Whether you’re a florist, bakery or local DIY store, consumers still want that physical interaction and are still heading to shops to buy goods. 

But running a physical store comes with its own set of challenges. From managing inventory to keeping the lights on, brick and mortar stores face their own unique cash flow hurdles. This is where a business credit card can make a real difference, helping how you handle day-to-day expenses and seize opportunities for growth.

Managing cash flow with a business credit card

When juggling supplier payments, utility bills and unexpected repairs, having a dedicated business credit card can give you some breathing room. Think of it being as much about smart cash flow management as it is having access to extra funds. 

A business credit card can also help you take advantage of bulk discounts from suppliers. Getting a great deal on a large inventory order and spreading the cost over time could increase your buying power and potentially improve profit margins.

It’s handy when unexpected expenses arise as well. Whether it’s broken air conditioners in summer or malfunctioning point-of-sale systems on busy weekends, these hiccups happen. A business credit card can give you the flexibility needed to cover unexpected costs without being out of pocket. 

Take FlexiPay from Funding Circle. It lets you spread costs over 1, 3, 6, 9 or 12 months, with a simple flat fee per transaction replacing interest. There’s no interest or hidden costs, meaning you get the freedom to manage your cash flow your way and cover the payments you need covered. 

Making the most of business credit card benefits

Many business credit cards offer rewards programs that are beneficial to owners of brick and mortar stores.

Look for cards offering cashback, so you get something back when you spend. The Funding Circle Cashback business credit card offers 2% cashback on all purchases (up to £2,000) for the first six months and then 1% on everything you spend after that. 

With no monthly fees (representative 14.9% APR [variable] ) and the flexibility to use your card for a wide range of business expenses—from inventory purchases to utility bills—it’s a versatile financial solution designed to support your brick and mortar store’s growth and day-to-day operations.

Expense tracking

Keeping track of expenses in a physical store can be challenging, with small purchases easily slipping through the cracks when it comes to accounting for what goes in and what comes out.

A business credit card provides a clear, itemised statement of all your spending, simplifying bookkeeping and tax preparation in the process. Having one means you could save valuable time, which can be particularly helpful when it comes to bookkeeping.

Many business credit cards also offer integration with accounting software, making it even easier to keep your finances in order. Having this level of organisation provides valuable insights into important aspects like spending patterns. You’re more informed about business decisions.

Employee spending management

If you have staff making purchases for the business, a credit card can help manage and track their expenses more effectively.

Set individual spending limits for employees and receive real-time alerts. This gives you more control over outgoings and helps prevent unauthorised purchases. Employees can easily categorise their expenses so it streamlines the reimbursement process and reduces administrative workload.

Making the most of interest-free periods

While business credit cards often have higher interest rates than traditional loans, many offer interest-free periods.

Our Cashback card gives you up to 42 days of interest-free credit. If you pay off the amount owed during this time, you won’t be charged interest on purchases. To avoid high interest charges, aim to pay off your balance in full each month. But if that’s not possible, prioritise paying more than the minimum to reduce interest accumulation.

Choosing the right card

There are plenty of business credit cards on the market. Should you decide it’s the right move for your brick and mortar store, you’ll need to make a decision that gives your business what it needs. 

Review your business expenses to identify where you spend the most. If you use it regularly, even for smaller items, our Cashback card could be beneficial as it gives you something back every time you spend. 

If you want to pay suppliers or make transfers, FlexiPay could be the right option. It gives you the flexibility to pay upfront by card or cash transfer. 

Also factor in annual fees, foreign transaction fees and interest rates. Weigh these costs against the potential benefits and rewards. Evaluate any other additional perks as some cards offer extras like travel insurance, purchase protection or extended warranties. These can provide added value for your business.

FlexiPay also benefits from zero interest. Instead, you pay one simple fee per transaction. 

Using your card responsibly

A business credit card can act as a great companion and help with cash flow, but it needs to be used wisely.

Think about your repayment strategy. Always have a clear plan for repayments, and avoid carrying high balances month to month. It could lead to significant interest charges.

Regularly review your statements. Check your statements monthly for any errors or fraudulent charges. Being quick to report issues can save you money and headaches down the line.

When used in the right way, a business credit card can help brick and mortar stores. From smoothing out cash flow to offering valuable perks, it’s a versatile solution to many financial challenges physical stores face. 

Whether you’re looking to manage day-to-day expenses more effectively, seize growth opportunities or gain more control over your finances, a business credit card could be the answer.

Business credit cards for brick and mortar stores

Every business is unique. What works for one shop might not be the best solution for another. Take the time to compare different options and think about how a business credit card would fit into your overall financial strategy. With the right approach, it could be the key to unlocking new possibilities for your brick and mortar business.

28/11/24: 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.