Access Financing, Small Business Credit Cards

There are two very different types of business credit cards:

• The first are business credit cards that can be used just like cash. These are the Visa, MC, Amex, and Discover cards.
• The second are business credit cards that can only be used at specific businesses. These are fuel and store cards such as Fuelman, Best Buy, Home Depot, Staples, etc.
• The next thing to understand about business credit cards is that with the exception of the major banks and providers such as Wells Fargo, Chase, Capital One, BofA, Amex, Discover, etc. the thousands of other credit cards are primarily underwritten and approved by Citi, Commenity, Synchrony, Wex and Elan. Each of these five underwriters have hundreds of cards they are private labelling, so you think it is a Home Depot card, but it is actually a CitBank card with Home Depot’s name on it.

From a business standpoint what this means is that business owners do not want to apply for four or five cards on the same day that are all underwritten by the same underwriter. They will think they are applying with Home Depot and Best Buy and Staples, when actually they are applying with CitiBank for their three underwritten cards all on the same day. Get declined for one and they then get declined for all three.

Get approved for one and most likely they will get approved for all three. In any case they will get three credit inquiries for all three. Business owners are better off applying for only one Citi, Commenity, Synchrony, Wex or Elan card, seeing if they get approved for that one and then applying for two or three more as they are almost guaranteed approval for multiple cards from the same provider after being approved for the first card from that provider. Never have your prospects apply for five or more from one underwriter or they will most likely get declined for them all.

The issuers of Visa, MC, and Amex cash type cards typically do not check business credit scores.

They approve "business" credit cards solely based on the personal credit and personal income of the business owners. The cash type business credit cards are basically a personal credit card with the business name on it. This is why they typically do not report to the business credit reporting agencies as the cards are not really tied to the business.

These cash type business credit cards also typically do not report on on the business owner's personal credit unless they default and then the all the cards will report personally. The reason they do not report on the business credit is they are not legally tied to the business so that in the event of a default they can come directly after the owner personally and are able to bypass having to take any legal actions against the business before they can come after the owner personally.

Cash type business credit cards are still excellent sources of working capital with no restrictions on the use of them or what is paid for with them. They can be used for rent, utilities, payroll, service providers, inventory or almost anything the business would normally have to use cash for.

Almost all that store and fleet business credit cards will report on business credit and many of those can be approved on business credit alone, the only downside to those cards is they cannot be used the same as cash. Keep in mind that business credit reports to the day. This means if these cards are paid one or five days late, they report the business as paying one or five days later which will damage the business credit. On the other hand, they also report if the business pays early so it will get a business credit boost by paying these reporting business credit cards early.