How do I get a business credit card?
Obtaining a business credit card in the UK involves a few key steps. Business credit cards can provide valuable benefits, including managing cash flow, separating personal and business expenses, and earning rewards.
1. Determine Your Business Needs. Consider how much you’ll spend monthly and what types of expenses (e.g., travel, office supplies). Estimate the credit limit you’ll need based on your business's financial requirements.
Decide if you want a card with cashback, travel rewards, or other perks tailored to business spending. Consider whether you plan to pay off the balance each month or carry a balance, which will determine the importance of the interest rate.
2. Research Available Business Credit Cards from major UK banks like Barclays, HSBC, Lloyds, and NatWest offer a range of business credit cards.
Consider cards from specialist providers like Capital on Tap, Tide, or Starling Bank. Use sites like MoneySuperMarket or Compare the Market to compare different business credit cards based on your needs.
3. Check Eligibility Requirements
Sole traders, partnerships, and limited companies can apply, but some cards may be specific to certain business structures. Both your personal and business credit histories may be reviewed.
Some providers require your business to be operational for a certain period (e.g., 1-2 years). There may be minimum turnover requirements.
4. Gather Required Documentation
Common Documents Include:
- Proof of Identity: Passport, driving license, or national ID card for the business owner(s).
- Proof of Address: Utility bill or bank statement.
- Business Details: Company registration number (if applicable), business address, and contact information.
- Financial Information: Recent bank statements, tax returns, or financial statements to demonstrate income and financial stability.
- Credit History: Some providers may ask for credit history reports.
5. Choose the Right Card
Look for cards with low interest rates if you plan to carry a balance. Consider annual fees, foreign transaction fees, and late payment penalties.
Choose cards with rewards that match your spending habits, such as cashback, travel points, or discounts on business purchases. Some providers offer free or discounted additional cards for employees.
6. Apply for the Business Credit Card. Most providers offer an online application form. Fill in your business and personal details, and upload the necessary documents. Visit a bank branch if you prefer to apply in person, bringing all required documents.
Some banks allow you to apply over the phone, with follow-up documentation submitted electronically or by post.
7. Wait for Approval. The provider will conduct a credit check on your business and potentially on you personally. Approval can take from a few minutes to a few weeks, depending on the provider and the completeness of your application.
8. Receive and Activate Your Card
Once approved, your business credit card will be mailed to your business address. Follow the instructions to activate your card, which typically involves calling a number or activating it online.
9. Use the Card Responsibly. Regularly monitor your spending to ensure it aligns with your budget and business needs. Make sure to pay at least the minimum payment by the due date to avoid late fees and interest charges.
10. Consider Additional Features. Many business credit cards offer online tools to help manage and categorize expenses. Issue additional cards to employees with spending limits and controls.
Look for cards with fraud protection, purchase protection, and extended warranties.