Credit Card ’s Talk

In an age of on-line payments and multinational business ventures, many small business owners are finding business credit cards to be a smart choice for simplifying payments, organizing expenses, and expanding the capability and autonomy of employees both locally and abroad. Before diving right in and applying for a small business credit card, however, every responsible business owner should ask himself or herself: is a small business credit card the right choice for my business?

There are several factors that can help determine this, but one of the simplest is how long the company has been in existence. Until a company has been around for at least two years, many banks and credit card companies may be reluctant to draw enough conclusions about the company’s financial responsibility to approve a large line of credit. In cases such as these, whether a business credit card is approved or not will depend on the personal financial and credit history of whatever individual–from business partner to simple employee–actually puts in the application for the card. This may not be a problem in the case of a rock-solid personal finance history, but if there’s any doubt, acquiring a good business credit card may be a trickier proposition.

Another thing to watch out for in the case of a startup small business is the question of personal financial liability. Since Santa Clara County v. Southern Pacific Railroad in 1886, corporations have had the legal status of individuals, except insofar as business credit cards for startup companies are concerned. The first years of any business are the hardest, and in the case of company bankruptcy, any outstanding financial obligations based on a business credit card will be the original applicant’s responsibility to meet. In the case of a large financial obligation, this can be a disaster for personal finance. Of course this is no argument against small business credit cards in all cases–far from it. However, any company interested in setting up a small business credit card would be wise to double-check its business plan and make sure that, in the rare event that the worst occurs, a Plan B for paying off the credit balance is firmly in place.

Even established small businesses would do well to examine their financial needs before taking the plunge with a business credit card. In the case of a business which involves a great deal of travel on the part of its employees, a large on-line business component, or a wide variety of expenses that require the business to deal with a number of different suppliers, a small business credit card is virtually essential. However, some small businesses are largely local, largely service-based, or have only a handful of employees authorized to make purchases. In cases like this, the reluctance of a few business credit card providers to allow disputes over billing errors or payments may actually complicate expense reporting and year-end inventories–sometimes a very real problem in the case of small businesses that have expanded far beyond their original business plan or intentions, resulting in a draconian system of purchaser agreements and expense accounts. So the decision to apply for a small business credit card should be made carefully, with defined uses for the card well in place, and a possible light restructuring of the business might even be warranted in order to ensure that payment responsibilities and individual employee purchasing requirements are well-defined in order to avoid possible later problems.

With all of these caveats, are business credit cards ever a good idea? Absolutely: these caveats represent only a few problems, nothing compared to the wealth of tools a good small business credit card can provide for a burgeoning small business. A good business credit card can–and usually does–simplify inventory management and tax reporting, allow employees a greater degree of autonomy on travel, make e-commerce easy, and, depending on rewards or travel mileage options, can even directly offset a large share of the expenses for some businesses. So yes, a small business credit card is, in the majority of cases, the smart choice for a small business. But as with all financial matters, care should be taken to determine when that smart choice should be made, or whether the business is structured to take full advantage of it.

For more information on how to contrast and compare business credit cards in order to help secure the best card offer for your business, Robert Alan recommends that you visit CreditCardAssist.com

So, you say you?ve got a small business and you?re looking for a credit instrument that could tailor itself to your business requirements? Well, your search ends here. Small business credit cards fit right in, helping you separate business and personal expenses.

A study by the Tower Group reports that two out of three small businesses use a small business credit card for purchasing and financing. So why are small business credit cards so prevalent? Small business credit cards offer small businesses a crucial edge allowing small business owners to expand or limit the growth of their business, as needed, providing the flexibility necessary to match their company?s growth needs.

Small Business Credit Card Edge

Help with Your Cash Flow: The best use of borrowed finances is to assist with month to month cash flow. Small business credit cards help you get the much needed credit to help your business grow while providing a margin of safety for your cash flow needs.

Maintaining Independent Accounts: Mixing your personal and business transaction accounts could lead to poor money management and potential tax problems. With a small business credit card, you?ll be able to maintain separate accounts on your personal card.

Help Balancing Your Books: This one is thrown in for free. With your card company maintaining an ongoing transaction record, you will have a convenient record of all transaction items that can be reconciled at tax time. Simply have the credit card company provide you an itemized list of all purchases made using their credit card and you?ll have some built-in transparency on all of your spending activities and financial accounts.

Build Your Credit Limit: Small businesses looking to expand need capital. You card provides your business with an opportunity to build your credit limit with consistent use and repayment over time. Access to more capital offers financial muscle to help grow the business, providing larger income opportunities for the small business owner.

Pre-Set Employee Spending Limits: For businesses wanting to keep a tight watch over their finances, these cards usually offer preset spending limits for employees, providing an excellent check and balance system for all your company expenditures.

Take Advantage of Special Offers: The competitive market has forced credit card companies to throw in special discounts and rewards programs. By examining the travel and entertainment requirements of your company, you will be able to grab offers that can help reduce your expenses through the use of reward point systems.

Tips for Selecting Small Business Credit Cards

If your existing business partners provide a small business credit card, it is probably a good idea to stick to them as you are more likely to get favorable rates and credit lines with an established credit line. Late payment and other such penalties will have to be borne by the company and not the employee. Therefore, give cards only to employees you absolutely trust and only provide credit limits that are in line with their expenditure requirements. Make sure the card you choose is widely accepted so that it helps meet everyone?s expense item needs.

Small business credit cards are quickly establishing themselves as an efficient way to increase capital and buying power for small businesses. While this calls for responsibility in its management, a small business credit card could go a long way in changing the face of your business for the better.

Robert Alan recommends that you visit CreditCardAssist.com for more information on how to use small business credit cards to take control of your business.

With the number of small and home businesses growing at such an incredible rate, it is no surprise that business credit cards are making more of a showing these days in the market place. It was not long ago that small business owners had to depend on small credit lines or business loans from banks to manage cash flow on a monthly basis, which could be tedious and costly. This meant spending more time doing paperwork for the bank, and less time managing the business.

The release of business credit cards has helped to alleviate these problems. About 65% of all small businesses are currently using business cards, and this number is only going to increase. Most major creditors now have a business credit card offering, and availability is increasing by the moment.

Business credit cards bring several powerful advantages to the table for the small business owner, including:

Cash Flow Management - The number one concern of almost every business owner is cash flow. A bad month can bring down an entire quarter is the business has no means to float itself through a rough time. Business credit cards can be a key element in making through a rough patch.

Credit Rating Increase - The credit rating of a business can mean more than just financing. Customers may not want to do business with a firm that has a poor credit history, and corporate growth will most certainly be delayed if not stopped entirely. Business credit cards used in a responsible way can help build the overall credit rating of the firm, as well as help open new avenues of financing down he road.

Spending Control ? Giving employees the ability to make purchases for the company on the fly can help streamline day to day business. This of course can also open the door to inappropriate expenditures, or simply over spending on needed items. With a little management these problems can be easily overcome, and recording as well as reporting corporate spending will be all the better for it.

Business Taxes ? For home based and small businesses credit cards offer the opportunity to consolidate all corporate spending. While a larger business would be hard pressed to do this, there is no reason every business expense incurred by a small business couldn?t be placed on a credit card. This means all corporate spending is managed through one sources, and when tax time comes around it is a simple matter to record.

Rewards Programs ? Using a business credit card to manage all corporate spending is a good way to earn bonus packages from rewards cards. Air miles and cash back incentive programs really add up if you are routing your business spending through one card.

Business credit cards are an indirect way to help solidify your firm in the mind of your client. Take them to lunch and pay with the corporate card. This shows a certain level of stability and depth to a possibly new firm, and also helps to increase your credibility.

From cash flow to taxes, to a greater level of spending control, business credit cards provide a valuable service to any size firm. As with all credit cards, care must be taking when managing their usage. For all the good they can do for a business, they can also cause problems when mishandled. Use the business card wisely and reap the benefits.

About The Author

Jon Norwood is a founder and managing partner of BankCardFinder.com, a site dedicated to providing fast and accurate information regarding credit cards that consumers need to make an informed decision on which credit company is right for them.

A Business Credit Card

Every major credit card company provides business credit cards. Amex, Visa, Advanta, MasterCard, Chase Manhattan Bank, Citibank, HSBC Bank, Discover, etc are some of the companies that provide business credit card products.

Business credit cards are primarily used to separate business and personal expenses. Business cards also help organizations cap employee spending unto pre-specified limits. They also help organizations optimize benefits for employees. For example, if a large number of employees shop at a particular retail store, the organization can negotiate a group rate discount on purchases made by their employees, and the benefits can be passed on to all the stakeholders, via credit cards. The credit card company can also generate itemized records of spending by all the employees, which can ease the tracking of employee spending.

Business credit cards also help extend the cash flow of small businesses that have fixed billing cycles and payout timelines. You can pay out cash to suppliers, business associates, vendors etc via credit card instead of using you cash account, and use the credit card billing cycle to pay the money back, after you have been repaid.

Flexible credit limits offered by business credit cards help small businesses ward off significant spikes due to increase in input costs, expenses towards unseen events, etc.

Business credit cards have two types of credit limits:

The Author is the webmaster of http://www.smallbusiness-creditcard.com This website lists the most popular business credit cards for you to compare and apply online.

Small business owners, or prospective small business owners have limited sources of financing when they first start out. Bank lenders have such stringent lending criteria that they often will not lend the amount needed by the entrepreneur to fund their startup. Even corporate finance companies will hesitate to loan money to start-ups as the risk for failure is high and the new company has no tangible assets that a loan can be secured against.

One of the easiest sources of financing a new business is credit cards. There are many stories of entrepreneurs who have funded their start-ups on credit cards. The credit cards are easy to get (applications are frequently sent in the mail) and plentiful through a number of different financial institutions. And frequent spending on these cards will even cause the credit card companies to increase the spending limits on their cards!

Of course, credit cards are a very dangerous financing tool if spending gets out of control and the holder cannot pay his or her debts off in a timely manner. New credit cards offers usually carry a low introductory rate, but 6 months later a much higher rate of interest can kick it making the borrowed money extremely expensive.

Regardless of this danger however, there have been numerous entrepreneurs who have started out their small businesses financing operations with their credit cards. Most of these people would then switch to more conventional financing options (ie banks) once they had a proven cash flow. But in the start-up phase, credit cards can prove to be an instrumental option for financing a new business when other sources of money are very tight.

Ken and Deidre Bissonette are successful authors and publishers of Small Business entrepreneur information. For more information http://www.business-finance-loan-credit.com/index.html