Small Business Credit Card Requirements

Co-mingling business with personal funds jeopardizes the corporate veil and puts you at risk to be personally liable for your company’s debts. If you’re guilty of mixing funds, you’re not alone because 65% of small businesses have credit cards and only 50% of those bear the corporation’s name.Small Business Credit Card Requirements

As a small business owner, you need to keep your personal and business funds separate at all times. A small business credit card can help you pay for daily expenses, such as office supplies, gas and networking functions. Additionally, it helps you track expenses, control employee spending, provide quick access to cash and can also come with perks like purchase protection, travel assistance, cash back and rewards.

Small Business Credit Card Requirements

Typically, you’ll need to meet certain requirements before you’re granted a credit card from a major bank. Here’s a list to get you started.

Authority

Typically the owner or authorized officer needs to apply for the business credit card. If your personal credit isn’t stellar then you may need to get a secured credit card, which means you’ll need a security deposit. You should never ask your employees to open an account for the business in their name. It makes them responsible for the business debt and the company responsible to them. That’s not good business.

Numbers

You’ll need your Employer Identification number (EIN) and social security numbers for all authorized users and signers. You may not have a EIN if you’re a sole proprietor. Instead, the bank will use your social security number.

If you’re a sole proprietor the bank will consider you and your business as the same entity. Therefore, you are personally liable for the business debts and for paying taxes on your business income. The bank will pull your credit score, assess your income and use your personal information to make a decision on whether or not to grant the credit card.

Business Details

The business gross sales and net profit for the last fiscal year will also be required. Bring proof of legal entity and address even if the address is your home. This may be in the form of utility bills, bank statements and checking accounts. You may even need to describe the business type and your specific title and function in the company.

Once you’ve satisfied these requirements, you’re ready to go. Remember to be truthful when applying for credit and always spend responsibly.

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