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Can You Get a Small Business Credit Card with Bad Credit?

Faith Stewart
February 2, 2021
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When it comes to getting funding to start and run a business, it can seem that everything depends on credit.  If you have bad credit, you may feel like you have no options.  That’s not the case. There is a secret sauce, so to speak, that can allow you to get a business credit card with bad credit.  From there, you simply have to handle your credit responsibly so you can build good credit. That will open up all the business funding options you could ever need. 

How Do You Get a Small Business Credit Card with Bad Credit? bad credit small business credit card credit suite

While the slit is narrow indeed, there is a place to slide through credit card approval with bad credit.  It takes knowledge however.  You have to know the secrets of where to look, and how to use that small foothold to build up strong business credit so you can qualify for more options. 

Brex Card for Startups

The Brex card for startups is one of the few true options for a small business credit card with bad credit. Even a FICO as low as 300 may qualify.  There is no annual fee, and you can apply with your EIN rather than your SSN.  There is no personal guarantee requirement. 

The only catch is, not all industries qualify, and some industries require more paperwork than others.
Wondering how they are able to verify creditworthiness if a business has bad credit? They look at the business’s cash balance, spending patterns, and investors.  

Not only can you get this card with bad credit, but they even offer rewards. For example you can get 7x points on rideshare and 4x on travel. Likewise, get triple points on restaurants and double points on recurring software costs. Get 1x points on everything else.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines via Credit Suite

Capital One Spark Classic for Business

If you don’t have stellar credit, but still hold your own with average credit, you may be able to get the Capital One® Spark® Classic for Business.  It also has no annual fee, but there is no introductory APR deal. The regular APR is a variable 26.99%. In addition, you can earn unlimited 1% cash back on every purchase for your company, with no minimum to redeem.

While this card is available if you have average credit scores, you do need to be aware of the APR. If you can pay on time however, and in full, then it’s a deal.

What if a Small Business Credit Card with Bad Credit Isn’t Enough?

What if you have bad credit, and that Brex card isn’t enough? Say you need more. Are there other options?  A business credit expert can help you find all the options you qualify to get, but here are a few to give you an idea.

Credit Line Hybrid

A credit line hybrid is unsecured business financing.  It allows you to fund your business without putting up collateral, and you only pay back what you use.  

It is not as hard to qualify as you may think.  You do need good personal credit.  That is, your personal credit score should be at least 680.  In addition, you can’t have any liens, judgments, bankruptcies or late payments.  Furthermore, in the past 6 months you should have less than 4 credit inquiries, and you should have less than a 45% balance on all business and personal credit cards.  It’s also preferred that you have established business credit as well as personal credit. 

Now you are wondering how on earth this relates to getting a small business credit card with bad credit.  However, there’s more. Here’s the key.  If you do not meet all of the requirements, you can take on a credit partner that meets each of these requirements.  Many business owners work with a friend or relative to fund their business.  If a relative or a friend meets all of these requirements, they can partner with you to allow you to tap into their credit to access funding. 

There are Many Benefits 

There are many benefits to using a credit line hybrid.  First, it is unsecured, meaning you do not have to have any collateral to put up.  Next, the funding is “no-doc.”  This means you do not have to provide any bank statements or financials.  

Not only that, but typically approval is up to 5x that of the highest credit limit on the personal credit report. Additionally, often you can get interest rates as low as 0% for the first few months, allowing you to put that savings back into your business. 

The process is pretty fast, especially with a qualified expert to walk you through it.  The lenders report to your business credit report, even if you have a credit partner. This means your business credit only gets stronger as long as you make payments on time, consistently. 

Also, with the approval for multiple credit cards, competition is created.  This makes it easier, and likely even if you handle the credit responsibly, that you can get interest rates lowered and limits raised every few months.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines via Credit Suite

Business Revenue Lending

Another option is business revenue lending.  You can get this type of funding with a credit score as low as 500.  Your business must earn annual revenue of $120,000 or more, and it must do more than 5 small transactions each month.  If your business brings in at least $15,000 monthly, then 6 months in business is acceptable.  You will have to fill out an application and provide 6 months worth of bank statements. 

Merchant Cash Advance

If you accept credit cards as payment, you may qualify for a merchant cash advance.  You only need a credit score of at least 500.  To qualify, your business must bring in $100,000 or more per year in credit card sales.  Typical approval amounts equal one months’ credit processing volume.  In addition to the application, you’ll need 3-6 months bank and merchant statements. 

Account Receivable Financing

Accounts receivable financing is another option.  You need to have open receivables from another business or government agency, not individuals.  In addition, you need to have been in business for at least one year. The minimum credit score is just 500.

You can get up to 80% of receivables advanced in as little as 24 hours.

Establish business credit fast with our research-backed guide to 12 business credit cards and lines via Credit Suite

It Is Possible to Get a Small Business Credit Card with Bad Credit

There is such a thing as a small business credit card with bad credit, but there aren’t many. It’s unlikely you will be able to get enough funding with business credit cards alone if your credit isn’t good.  These other options are available however.  The business credit experts at Credit Suite are trained to help you find the best options for your business.  They can also help you use them to build business credit, so you have access to more funding in the future. 

This is important, because even if funding requires a personal guarantee, strong business credit can only help you. If you have really good personal credit, strong business credit can help you get better rates and terms. If your personal credit is lacking, strong business credit can help you gain approval anyway by showing lenders that your business, itself, is creditworthy. Either way, these options for funding with bad credit can help you get started.

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