How to apply for a business credit card

Obtaining a credit card early on sets your company up for long-term success. Here’s advice from professionals on how to begin the process.

When setting up your business, it’s important to secure a reliable method for financial transactions. Having a line of credit designated for your business will streamline your budget and expenses with a single source of funding.

Use this guide to learn about the process and prepare to apply.

Advantages to consider

Having a business credit card offers many benefits. One of the most important advantages is that a business credit card keeps business financials separate from your personal expenses. This builds business credit and prevents a complicated process of tracking and dividing up costs.

In addition, you’ll have the ability to obtain short-term cashflow for 30-day cycles. “You can put something on a credit card and float that for 30 to 45 days,” says Timothy Menoher, vice president of high value business card sales and acquisitions at U.S. Bank. “That might help you pay for other stuff as well – it extends your operating cycle and definitely adds a level of credibility to your business.”

Rewards are another potential perk, which can be earned over time and then applied back to the business for marketing needs or other purposes. For businesses that have significant expenses, rewards can be put back into the business with cash-back funneled towards your bottom line, gift cards as employee incentives or for travel expenses. 

When to apply for a credit card

If you’re in the early stages of launching your business, you’ll likely have many priorities. These might include creating a website, hiring staff and exploring real estate for a brick-and-mortar location. Rather than waiting to complete these steps, it’s best to apply for a business credit card as early as possible.

“It’s one of the few products you can get at day one, once you’ve opened the business,” says Mark Patterson, vice president and high value business card team manager at U.S. Bank, emphasizing that there’s no reason to delay this important step. “A lot of business owners tend to use their personal cards – [a business credit card] makes it easier to keep finances separate.”

Starting early will also play a positive role in your access to financing in the long run. Companies often need more capital once they expand, and building credit is an essential part of getting qualified for this type of funding.

“At six months, a year or two years down the road, you might need a bigger line of credit, or a much larger line that on your personal credit you can’t take on,” explains Timothy. “It’s incredibly important early on to start establishing business credit.”

How to create a strong foundation with good credit

In order to get approved for a business credit card, you’ll need to demonstrate good personal credit history. Before applying, make sure you’re laying a solid foundation with timely payments and responsible purchases – keeping in mind that this takes time.

What to expect from the application process

When you’re ready to get started, you can apply online, make an appointment to apply in-person at your local U.S. Bank branch, or choose the text to apply process, which both entail a simple one-page application.

Within the application, you’ll be asked to answer questions about your business, questions about yourself, and disclose who any beneficial owners are. If anyone has 25% or more ownership in the business, you’ll need to provide their information as well. Once you’re approved, you’ll add your employee information too.

“Be prepared to answer five or six basic questions about your social security number and tax ID, and basic pieces of information,” says Timothy. “It’s a quick, easy process. Within five to ten minutes, you can be approved.”

Here’s a list of the basics to have ready for the application process:

• Business’s legal name 
• Contact information for your business
• Contact information for you, including credit history and SSN
• Industry type (ex: restaurant, salon, etc.)
• Legal structure (ex: corporation, nonprofit, LLC, etc.)
• Time in business
• Number of employees
• Federal Tax ID (or EIN)
• Annual business revenue and average monthly spend
• Total annual income
  

Learn more about U.S. Bank credit card options and how we can help your business succeed.

If you have questions about any step of the application process, you can contact your local U.S. Bank branch for guidance and support or call the bank at 1-800-872-2657.