If you think that business credit card and corporate credit cards are the same, let this article help you compare the differences between the two. If you own a small business, you’ll be glad to know that small business credit cards are especially meant to serve small business entrepreneurs like you.

Finance companies realize the potential of the small business clients and for this reason, they have introduced these cards in the market. Unlike the corporate one, applying for these cards is not at all complicated. In fact, even newly started business can get approved for these cards using the business owner’s personal credit history. But what if your personal credit score isn’t as impressive as you want it to be?

Secured business credit are designed especially for business owners with bad credit. To make up for your bad credit, a collateral or “security” would be required and this can be your home or a property that you own. Both an unsecured and a secured one are great tools in establishing a separate credit for your company.

What about corporate credit cards? As its name implies, these cards are exclusively offered to large business owners or corporations. If you take a look at these cards advertised today, all of these are for small businesses. Credit cards for corporations are actually not advertised at all.

Unlike for a small business where you can apply online, these cards involve a more complicated procedure. How can a large business obtain one? Before the application is submitted, the business owner along with his partners will set up a meeting with the card’s representative. In this meeting, the specific needs of the company would be discussed as well as the requirements they need to submit for approval.

Since a corporation is often a partnership and involves a huge number of employees, one can expect that it also has complex needs. The credit company would see to it that these specific needs are properly addressed and that these cards will duly serve its purpose.

Clearly, no matter what type of business you own- whether it may be a small business, homebased business, medium-sized business or a corporation- there is a card that is designed to suit your needs. If you’re a small business entrepreneur, there’s no need to be afraid that a business credit card is just made for businesses with incredibly huge expenses. Even if you only have a few business expenses, getting a business credit card is worth the deal.

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The current small business credit crunch is getting much attention and rightly so. We know very little about the overall small business universe because it is so huge and diverse. Most discussions about this topic focus on credit and lending, but the issue is much more complex than that. A more broad-based discussion is necessary to understand the full extent of the current crisis. The crisis encompasses both types of financing, debt and equity.

Personal Wealth

In good times or bad the top source of small business capital is the personal wealth of the owner. Even beyond startup, owners often tap into their personal wealth like a line of credit, on an ongoing basis. If available, personal wealth is easier to access than other forms of financing and may be the only source available. The primary sources of personal wealth are typically real estate and retirement accounts. Since 2008 both of these sources have taken a huge hit, so the amount of personal wealth available has plummeted. Most owners are experiencing the worst economic times in their lifetime. So even if they have personal wealth available, they are less likely to invest it in their businesses. Instead, they are cutting back or forgoing expansion.

Friends & Family

Another common source of capital has essentially dried up – friends and family. For the reasons discussed above, friends and family have less wealth available and are less willing to invest.

Creditworthiness

The ability of a private company to borrow funds depends on the cash flow of the company, the available collateral, and the credit of the owners. Most small business revenue, profits and cash flows are down substantially. The value of available collateral, often including the personal residence of the owners, has also dropped significantly. The compensation of the owners is often based on profits, so it is down, too. With both personal income and wealth declining, the credit score of the owners has likely declined as well. All of these factors, in combination, result in less creditworthy private companies.

Credit Cards

Another common source of capital is using credit cards typically based on the personal credit of the owner. Credit card companies have tightened credit standards for getting new or increasing existing credit lines. In many cases they have actually reduced existing credit limits. As discussed above, the creditworthiness of both the owners and the company has declined. The result is that credit card financing is less available and tougher to get.

Bank Financing

Many banks have funds available and seem willing to increase small business lending, but have other issues preventing them from doing so. The demand for business loans has decreased because many companies are cutting back or forgoing expansion. As discussed above, there are fewer creditworthy companies. Many banks are facing increased pressure from regulators to reduce risk while experiencing difficulties with some of their commercial real estate loans. Although small business loans can be very profitable, they are very risky. Many small banks are more familiar with other types of loans and may have little experience dealing with Small Business Administration (SBA) loan programs. Continuing issues with the funding of SBA programs has created some doubt about the availability of loan guarantees. Again, the result is bank financing is less available and tougher to get.

Conclusion

All of these issues create a complex small business financing crisis that requires broad-based solutions. A vigorous and sustained economic recovery would alleviate many of the issues, but many expect small business to lead us out of the recession. How is that supposed to work? We need better ways to finance small businesses. Ones that will enable institutional and individual investors to invest in small, private companies like they currently do in large, public companies. The expansion and increased visibility of the secondary market for SBA guaranteed loans is a small step in the right direction that will hopefully lead to a more comprehensive solution.

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Most businesses require money to start and to grow, and generally, business owners need to obtain some sort of financing in order to get the money they need. It can be challenging for a start-up business with no assets to secure a loan from a bank, especially in an economy where banks are limiting their lending. If you do not have other sources of funding to draw from, credit cards may be your best – and only – financing option.

At first, you may think it will be expensive to finance a business using credit cards, but it doesn’t have to be. In fact, several business people have successfully started their small and home-based businesses with the help from these financing alternatives. Others use this funding technique as a line of credit to successfully grow their businesses.

Obtaining Credit

If you already have a credit card you can use to start your business, this may be the right move for you, instead of opening a new account. Once you start using it for business, however, you will want to designate it for company expenses and use it exclusively for business and not personal purchases.

If you decide to open a new account, keep in mind that the card does not need to be advertised as a “business” credit card. You can get a regular or a business account, but in either case you will want to use the card exclusively for business purchases. Because you have this option, the number of cards you can choose from is greater, which means it will be easier to get a better deal and save money.

Sometimes it can be easier for home businesses or start-ups to open an account under a personal name rather than a business name because they have an established credit history. With a good financial background, it is easier to secure a higher credit limit than without any history at all.

How to Save Money with Credit Cards

When you start a new venture, you want to be careful to not waste your money. It is important that you minimize the interest you pay and avoid hefty annual fees. Use comparison tools online that let you see rates, fees and benefits of multiple cards at one time. This can save you lots of hours and dollars.

Credit companies that offer zero percent introductory rates can save business owners hundreds of dollars, especially if they are able to pay back the borrowed funds by the end of the introductory period. On top of that, cash back, travel or rebate reward programs can also put money back in the business owner’s pocket.

More Benefits

At a time when many products and services are exchanged online, credit cards make it easier for small businesses to purchase items on the web that the company needs. Sometimes the company needs supplies or equipment before it can complete a project that will bring in revenue – leveraging money with credit cards in this manner can help a small business get off the ground.

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If you are opening up a small business, obtaining a small business credit card is something that you should look into. It will be an essential business tool for you during this beginning time of your company as well as during growth periods. There are many assorted credit cards available to small business owners with assorted features and benefits each geared to a different result.

For those who do not have a lot of time to spend on the phone with different financial institutions discussing business credit card options, the Internet is a fantastic resource for gathering all the information you need. With so many lenders listed online, you can browse each type of credit card along with the benefits as well as apply through a secure website in order to complete your application in minutes.

Small business credit cards are useful business tools for things such as ordering supplies, keeping track of business spending habits, or even securing contracts with your suppliers. There are a number of credit cards that have a variety of rewards programs that are available to small businesses. These rewards include:

* Cash Back options

* Frequent Flyer Air Miles

* No annual fee

* 0% APR

* Automobile dealership specials (discounts for gas, parts, service, etc.)

* Travel rewards (discounts for hotels, rental cars, gas, etc.)

When looking for your credit card, the lender can be very choosy on who is eligible to apply for these specific cards. For some financial institutions, your small business will have to fit into their predetermined mold of a small business in order to be eligible to apply. Employee size, amount of revenue, and even personal debt or assets will have an effect on your credit card application with most lenders.

Once you have chosen the business card that is right for you, through a lender that you can trust, making use of that credit card is important. Do not overextend your predetermined limit. You do not want to start your small business off on the wrong foot by letting your business credit card go out of control quickly. Use your credit card to secure office suppliers, pay your lease on the office space, and even help track petty cash spending rather than trying to keep small, detailed receipts. Having a small business credit card around to utilize for your business needs will make your life easier and hassle-free. Many lenders will provide detailed statements outlining and grouping your purchases for you in order to help keep track of spending for budgetary reasons.

Be sure to choose small business credit cards that enables you to reap the benefits of usage. If you travel frequently for business, secure a credit card that recognizes and awards frequent flyer miles. If using your credit card for business luncheons is the main resource of spending, try applying for a Cash Back business credit card in order to regain some of that everyday spending. No matter what the reasons are for your small business card, there will be one out there for you with benefits to utilize.

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Amex boasts an inventory of American Express Credit Cards suited for both businesses and consumers alike. American Express financial services has some of the finest rewards and cash rebates cards in the credit card industry. They also include low rates, 0 percent introductory offers and cashback, which are applied directly into your account.

Blue from American Express offers 0% intro rates on everything you buy for 15 months with a low balance transfer APR of 4.99% fixed APR until the debt is retired. Rewards from American Express is an added component to these credit cards. The regular rate of 12.24% APR is charged following the expiration of the grace period. You will also enjoy superb shopping deals and other venues.

American Express Blue Cash gives card holders 0 percent intro annual percentage rate for 6 months on your new purchases and a fixed rate of 4.99% APR on balance transfer until the balance is paid in full with application. The predetermined interest rate of 12.24 percent APR is established upon the termination of the intro period. You can get 5% cashback with no restrictions on the amount of rewards you can accumulate. This offer has no annual fee. It stacks up rather well with American Express Platinum as an outstanding credit card.

The Amex Clear Card offers 0% Introductory APR on purchases for 12 months with a low rate of 5.99% APR on transfered balances from other credit card issuers that are good for as long as you are cardholder in good standing. The standard interest rate of 13.24% APR begins when the introductory period expires. You will receive automatic rewards for whenever you spend $2500 you will receive in the mail an American Express gift card. There are no fees associated with this card, this includes annual fee, late fees, over the limit fees, balance transfer fee or cash advance fees. The payment terms are flexible: the option is yours to pay in full or carry a balance. World Class Cardmember bonuses also apply to this card including Purchase Protection, Buyers Assurance Plan and Return Protection.

American Express BlueSky has a 0 percent intro rate for 6 months on purchases and a low interest rate of 4.99% annual percentage rate on balance transfers. The standard interest rate of 12.24% APR is charged following the expiration of the introductory period. You will earn one rewards point for every dollar you spend. You can take advantage of your points to save on travel including airfare, hotel and rental cars with no blackout dates or travel restrictions. The World Class reward program are a feature of this credit card, including Travel Accident Insurance, Buyers Assurance Plan, and Return Protection. No annual fees are charged on the American Express Business Cards.

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