Most owners of new businesses realize the efficacy of obtaining a business credit card as soon as possible. This allows you to better separate your personal and business finances, and it also enables you to build a credit history for your company. Here are the steps to take to open a credit card while starting up a new business.
Provide Details on the Application
When you fill out an application for a business credit card, you will need to provide information about you and your business. This includes the name of your business, its phone number and address, the industry you work in, the specific date that your company started, and its tax ID number or your own Social Security number. You will also need to identify the company’s legal structure. Depending on its size and whether you work alone or have partners, this could be a sole proprietorship, a partnership, a limited liability company, a corporation, or an S corporation. You are also required to state the business’s annual revenue, but if your company has not yet made any money you can say so.
Personally Guarantee the Debt
Because your business is new, it may not yet be financially viable. For this reason, you have to guarantee any debt you accumulate on the card personally. The issuer of the business credit card will check your personal credit history and credit score. If your company does not pay its debts, the card issuer can claim your personal assets.
Select a Business Credit Card That Matches Your Needs
There are a number of factors to consider when selecting a credit card that fits the needs of your business. For instance, some but not all business credit cards have annual fees, and some offer sign-up bonuses as well as ongoing benefits and rewards. Some cards offer special perks for business people who do a lot of traveling. Others offer bookkeeping tools that are particularly useful during tax season. If you are intent on boosting your company’s credit score, be sure that the card issuer reports to the major credit bureaus.
For more advice on obtaining a business credit card, contact Northgate Capital Finance.