Credit Cards

Credit Cards For Small Businesses With Bad Credit

Credit Cards For Small Businesses With Bad Credit

Are you a small business owner with bad credit? If so, you're not alone, but getting a credit card for your business might seem like an insurmountable challenge. Fear not, my fellow entrepreneurs! Flik Eco is here to guide you through the process of finding and securing a credit card for small businesses with bad credit. In this article, we'll explore the options available, discuss the pros and cons, and give you some practical advice on how to improve your credit score and financial future.

Credit Cards For Small Businesses With Bad Credit Table of Contents

Alternatives for Small Business Owners with Bad Credit

Alternatives for Small Business Owners with Bad Credit

Even if your credit score is not ideal, there are still several alternatives for small businesses with bad credit that could help get your business moving in the right direction.

Secured Business Credit Cards

  • A secured business credit card is one option that requires a cash deposit as collateral. Your credit limit will be based on the amount you deposit, and this shows the card issuer that you can be trusted to repay your balance.
  • Secured cards often have higher interest rates and fees, but they can help improve your credit score over time with responsible use and timely payments.
  • Keep in mind that the deposit will not be accessible to you while the account is open, so make sure you can afford to part ways with that cash for a while.

Unsecured Business Credit Cards for Bad Credit

  • Some unsecured business credit cards cater to those with bad credit, although they are typically more difficult to obtain.
  • These cards often have higher interest rates, lower credit limits, and less favorable terms compared to those with better credit scores.
  • If your main goal is to improve your credit score, unsecured credit cards may have a less significant impact compared to secured business credit cards.

Business Charge Cards

  • Business charge cards are different from credit cards in that they require you to pay off your balance in full each month.
  • Charge cards may be easier for small businesses with bad credit to obtain, as they may have less stringent credit requirements than traditional credit cards.
  • Keep in mind that charge cards often come with high annual fees and interest penalties if the balance is not paid off in full each month, making them potentially costly for small businesses.

Jane is a small business owner who runs a local bakery. Unfortunately, she has a low credit score due to some past financial difficulties. This is what Jane's journey might look like as she pursues a credit card for her small business:

1. First, Jane researches various secured business credit cards and compares their fees, interest rates, and reward programs. She eventually settles on a card with a manageable cash deposit requirement and a reasonable interest rate.

2. Jane steadily uses her secured credit card for business expenses while making timely payments. Over time, her credit score starts to improve.

3. After several months of responsible credit use, Jane applies for an unsecured business credit card. Although the interest rates are still slightly higher and the credit limit lower than she'd like, Jane continues to use her new unsecured card responsibly.

4. In the end, Jane is able to successfully improve her credit score and continue to grow her small business.

If your small business is struggling to secure a credit card due to poor credit, remember that there are options available to help you succeed. By considering secured business credit cards, unsecured credit cards for bad credit, or business charge cards, you can take a proactive approach to improving your financial situation and growing your business. Flik Eco is here to guide you on your journey to better money management, so feel free to explore our other guides and share this article with others who could benefit from it. Good luck, entrepreneurs!


About Jermaine Hagan (The Plantsman)

Jermaine Hagan, also known as The Plantsman is the Founder of Flik Eco. Jermaine is the perfect hybrid of personal finance expert and nemophilist. On a mission to make personal finance simple and accessible, Jermaine uses his inside knowledge to help the average Joe, Kwame or Sarah to improve their lives. Before founding Flik Eco, Jermaine managed teams across several large financial companies, including Equifax, Admiral Plc, New Wave Capital & HSBC. He has been featured in several large publications including BBC, The Guardian & The Times.

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