Published By Janet Gershen-Siegel at March 30th, 2018
Get a company credit card. It’s not out of reach. We can show you how to get a business credit card even if you think you can’t and even if the banks say no. But first, let’s talk a bit about lines of credit.
A credit line, or line of credit (LOC), is an agreement between a borrower and a financial institution or private investor which sets a maximum loan balance that a borrower can access.
A borrower can gain access to funds from their line of credit at any time, as long as they don’t go over the maximum set in the arrangement, and as long as they meet any other conditions of the bank or investor for instance, making timely payments.
Credit lines provide many unique advantages to borrowers, like convenience. Borrowers can apply their line of credit and just pay interest on what they use, in contrast to loans where they pay interest on the full amount borrowed.
Credit lines can be reused, so as you acquire a balance and pay that balance off, you can use that accessible credit again, and again.
Credit lines are revolving accounts similar to credit cards, and are comparable to other kinds of financing like installment loans. Frequently, lines of credit are unsecured, much the same as credit cards are.
There are some credit lines that are secured, and consequently easier to get approval for.
Credit lines are the most routinely sought after loan type in the business world even though they are preferred, legitimate credit lines are unusual, and tricky to find. Many are also very hard to qualify for calling for good credit, good time in business, and good financials.
But there are various other credit cards and lines which few know about that are attainable for startups, poor credit, and even if you have absolutely no financials.
Credit cards generally offer 0% intro rates for up to two years. This is extremely valuable for startups especially. And credit lines allow you to take out more cash at a much cheaper rate than do cards.
These are the principal two differences which will have an effect on you between credit cards and credit line. Investopedia even says that, “lines of credit are potentially useful hybrids of credit cards.”
Both cards and lines are revolving credit. Credit lines are harder to get approval for as card approvals are normally very quick, many times automated, while line require an in-depth underwriting review.
Lines usually offer lower rates, per Bankrate card rates average 13% while lines average 4%.
The majority of them report to the consumer credit reporting agencies. They all need a personal guarantee from you. You can get approval in general for one card at the most as they discontinue approving you when you have two or more inquiries on your report.
Most credit card providers furnish business credit cards including Capital One, Chase, and American Express. These have rates similar to consumer rates and limits are also similar.
Some report to the consumer reporting agencies, some report to the business bureaus. Approval requirements are similar to consumer credit card accounts.
Generally, when you apply for a credit card you put an inquiry on your consumer report. When other lenders see these, they won’t approve you for more credit because they have no idea how much other new credit you have recently obtained.
So they’ll only approve you if you have no more than two inquiries on your report within the most recent six months. Any more than that will get you a refusal.
With our Credit Line Hybrid, you partner with a lender who concentrates on securing business credit cards. This is a very uncommon; hardly any know about program that few lending sources offer.
They can often get you more approvals than you can get on your own. This is because they know the sources to apply for. They also know the order to apply.
And they can time their applications so the card issuers won’t refuse you for the other card inquiries. Multiple cards create competition, and this means you can get your limits raised usually within 6 months or less of your original approval.
Approvals can go up to $150,000 per entity for example, a corporation. Not only will you get money, but you build your business credit as well so in three to four months, you can then use your recently established business credit to get even more money.
Just like with just about anything, there are substantial benefits in working with a source who concentrates on this area; the results will be much better than if you attempt to go at it alone.
You have to have excellent personal credit now. Or work with a guarantor with excellent personal credit.
You can get approval making use of a guarantor and you can even use several guarantors to get even more money. There are also other cards you can get using this very same program.
But these cards only report to the consumer reporting agencies, not the business reporting agencies. They are consumer credit cards versus business credit cards.
They offer similar benefits which include 0% intro annual percentage rates but they are much easier to qualify for.
With the preceding cards, you will need to have good consumer credit in order to get approval but what if your personal credit isn’t good, and you do not have a guarantor? This is the time when building business credit makes a great deal of sense.
Even if you have good personal credit, building your corporate credit helps you get even more money, and without having a personal guarantee.
Business credit is credit in a company name, that’s connected to the company’s EIN number. You can get corporate credit cards, even as a startup.
Vendor accounts generally offer net 30 terms used to launch a business credit profile. These are generally easy to get and will help you afford business supplies while building your business credit scores.
Your company can get credit cards and financing, if you know where to look. Learn more here and get started in how you can get a company credit card.