As a small business owner, you’ve probably been inundated with offers to take out small business credit cards. You may have resisted for fear of taking debt out on your business, but this is great because it can be a good idea, as they enable you to have a revolving line of credit and increase your purchasing power.
Here are some good reasons why you might want to consider a credit card for your business.
Separating business and personal expenses
As a small company or a solo entrepreneur, you may end up using your personal card for things that you should be putting on your business expenses. For such small business expenses, you want your business credit card as it makes it easy for record-keeping, and allow you to pay off on a monthly basis.
Building your business credit score
If at any point in the future you want to take out some finance to expand your business, or if you require working capital, then having a business credit score can make things much easier. If you use your credit card responsibly and have low-interest rates, then it can be a pretty painless process, and you can build for the future for your credit score at the same time.
Save some time
Business credit cards can be pretty useful when it comes to record-keeping. Some of the providers these days have some advanced technology that does automatic record-keeping and can help you manage your expenses much more easily than using a bank account.
Understand and control employee spending
A business credit card enables you to have different cardholders and so see exactly what people are spending in real-time through your business. You can set individual limits for different people, and you can make sure that people aren’t spending on things that they should be spending on.
Business credit cards are really convenient. They make it easy to access extra funds, make payments and are, of course, are a very cheap line of credit.
Making taxes simpler
If you have all your expenses for your credit cards, rather than having to consolidate personal accounts, bank accounts and personal credit cards, it makes tax time much easier. You know exactly where you are each month with your cash flow, and you can easily reconcile your credit card information into tax software for expense calculations.
Business credit limits
If you have a strong business, then your business credit card limit is high. This can make business credit cards are a very good way of making purchases at low-interest rates and paying back the following month or over a short period.
Of course, if you intend to use a credit card this way, you should first know the value of your business to determine if you can get such a high limit on your business card.
Easy sweeping from your business account
Business credit cards often make it easy to pay off your monthly balance by sweeping from your business account. This means that the process is hands-free and really simple.
Understandably, some people are reticent about taking credit out in their business. However, if you use credit responsibly it can build up your credit profile, add some flexibility to your business and make things a bit easier when it comes to reporting and so much more.