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How to Get a Business Credit Card with No Credit History

Because a business credit card can help a business manage its finances more efficiently, it is an indispensable tool for small business owners. With a business credit card, you can easily fund the day-to-day operations of your business and make larger investments for the long-term. So, a business credit card provides your business with an additional line of credit and the opportunity to earn company benefits from the issuing company.

As a small business owner, you might find it difficult applying for a small business credit card if your business has no credit history. Most banks typically require that your business have a credit history before you can be issued a business credit card, so they won’t approve your application if the condition isn’t met.

Interestingly, however, getting a business credit card with no credit history is quite possible. How? This article explains the various options you can adopt to make that happen.

How to Get a Business Credit Card with No Credit History

1. Contact your banker

Many banks, credit unions, and other financial institutions are willing to issue business credit cards to businesses that have an established financial history with them; even if such businesses have no credit history. These institutions assess the business’s financial history and other related factors, and then decide whether to approve or decline the business credit card application after assessing.

While you may not be able to have your way with larger national banks, local banks are particularly “lenient” with their conditions. So, contact your local bank or financial institution and apply for your card. A business credit card issued by local financial institution can help your business build the credit history required to apply for a business credit card at larger, national banks.

2. Contact your business service providers

Certain business service providers, especially those that help your business handle finances can issue business credit cards to businesses they serve. For example, PayPal and Costco typically offer business credit cards to their merchant account holders.

3. Piggyback on your personal credit

Many financial institutions—regardless of whether you have a business account with them or not—will approve your application for a small business credit card if you, the business owner, have a decent credit score.

Your business does not necessarily need to have a credit history. Your personal credit history will be assessed by the institution and you should have no trouble getting accepted for a card if your credit score is fine. Simply apply using your personal credit card.

4. Get a retail credit card

Some non-financial institutions can issue business credit cards. For example, a gasoline company or department store can issue retail credit cards to owners of businesses they serve. Though these cards cannot be used to borrow money, they can be used to buy things at certain stores. However, they usually have a higher interest rate than bank-issued credit cards.

5. Obtain a secured credit card

If for some reason you cannot adopt the previously explained options, you can obtain a secured business credit card. A secured business credit card works just like the regular credit card, but it does not require a credit history, since your company’s debt is tied to a physical asset such as real estate or other valuable property. This “secure” arrangement leaves the issuing company assured that their debt will be repaid even if your company defaults on the credit card account.

Usually, the credit limit for a secured business credit card is restricted to a percentage of the value of the asset to which your debt is tied. While a secured credit card can help you build credit so that you can eventually qualify for a regular business credit card, obtaining it is not a very popular option because most lenders think it’s not profitable. For this reason, only consider this option as the last resort, after all other options have failed.

6. Build credit

If your personal credit score cannot get you qualified for a business credit card and you don’t like the idea of getting a secured business credit card, then you should consider building your credit. First, establish your business as a corporate or LLC and get a tax ID (Employer Identification Number). Then you can start establishing a credit history for your business. Start by opening a business bank account and getting listed with the business credit bureau. Having done all that, you can start borrowing and repaying money.

On a final note, be reminded that the debt on a secured business credit card will be tied to your company’s physical assets and thereby poses huge risks to your business. So, only consider getting a secured business credit card as a last resort.