It is often difficult for a newly established small business to obtain a new business credit card. When an individual is beginning a new business, a credit card or a line of credit will be an essential component in establishing and developing the business.
It is important that an individual take the steps necessary to effectively separate his/her personal credit from the business credit. He/she will want to ensure that he/she has obtained business credit that has no impact on his/her personal credit and no connection to his/her personal credit. This can be challenging, as the majority of credit lenders will not offer new business credit cards unless the business owner provides personal information, credit history, and personal assets as collateral. There are some steps that an individual may take to obtain a new business credit card.
If an individual wishes to obtain a new business credit card that is completely detached from his/her personal credit, he/she must first establish business credit. This can be achieved by acquiring a small business loan or line of credit from a vendor. For example, a small business owner can obtain a line of credit from business-oriented companies, including Staples and Dell. If the business uses these lines of credit responsibly, it will begin to establish business credit.
The payments provided to the lending vendors will be reported to business credit agencies. With this business credit in place, it will be more likely for an individual to obtain new business credit cards from a lender.
It is possible for an individual to obtain a new business credit card by providing personal credit history and information, and by offering personal collateral; however, it is often advantageous to avoid this if possible.