To build your corporate credit rating you will need to acquire a secured business credit card to get started. Unlike a regular credit card, a secured business credit card will allow you to only use up to the amount you deposit to secure the card. You are required to make monthly deposits in order to keep the card in good standing. It is important make those monthly deposits on time or you will hurt your business credit rating.
The great thing about a secured business credit card is that you don't need to worry about losing money as you cannot spend more than the limit amount. You are only able to spend up to the amount you deposit. This way you can keep a closer eye on your business finances, especially if you are handing over the business credit cards to your employees.
One of the immediate differences you will notice with a secured business credit card and a traditional credit card is the way the card is secured. With a secured business credit card, you are using your business savings account to open and sustain the card. An unsecured business credit card doesn't quite offer the same advantages because it includes a high interest rate. This is the only way in which a lender can make back the money you borrow. If you declare bankruptcy, the lender will be responsible for assuming the debt, which is why you must have a high credit score in order to acquire the loan.
A secured business credit card can be used just like a traditional credit card as you have a set limit and you can only spend up to that amount. You are required to make an initial down payment on the credit card and then you will make monthly down payments on the card to keep it secured. Lenders that offer you a secured business credit card usually need to see your bank account records to verify that you have a savings account and that you have a couple thousand dollars in the account to secure the card.
To acquire the secured business credit card, you must also agree to the application costs and administrative fees that come along with the card. If you do go over the limit on the card, you will be penalizes so you need to be extremely careful about doing this. Typically you can only go over by a few dollars and this will eat into you initial deposit amount. Anything over this amount, the card will actually decline when you use it. This is also based on the credit restrictions of the lenders when you acquire a secured business credit card.
Secured business credit cards may take some time to help you build up your corporate credit rating, but you will be able to build it up over time. The nice part about a secured business credit card is that you can easily use the card to show other businesses that you have a strong company as you will flash your business card around. Even a company that doesn't have a strong credit rating can acquire secured business credit cards to help expand their cash flow.
For a business that is desperate to start building their business credit and is in need of some emergency cash, a secured business credit card is one of your best options. Vendors can sometimes be reluctant to work with a company that doesn't have a business credit card, which is why you need to acquire a secured business credit card if you are unable to acquire an unsecured one.
Corporate Credit Concepts specializes in secured business credit card. For more information about secured business credit card and how it might benefit your business, please CLICK HERE for a free phone consultation.