How to Qualify for a Small Business Credit Card

Learn the ins and outs of selecting a business credit card to improve your application's chances of getting accepted.

Updated: April 4, 2024
Matt Crabtree

Written By

Matt Crabtree

|
Rebecca Goodman

Edited By

Rebecca Goodman

 
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If you have your own business, it can be useful to have a credit card for making purchases. It will help you to spread the cost of big items, you may earn cashback or rewards, and it can be a handy way to keep track of your spending.

However, a credit card can only be beneficial to your business if you're using it correctly and making repayments on time. If not, you could end up paying hefty interest fees and harming your credit score.

As long as you have a steady stream of revenue from your firm, you may qualify for a company credit card. If you use the card responsibly, it might help your company to establish a credit history, which could make it simpler (and cheaper) to borrow money in the future.

Applying for the wrong business credit card, on the other hand, might have a negative impact on your credit score.

For this reason, it is essential to prepare well for the application process, pick a card that suits your business, and to understand how to use it. In this guide we explain everything you need to know.

ServiceScoreRegister
1. Capital on Tap Business Credit Card★★★★★Click Here
2. Barclaycard Select Cashback Business Credit Card★★★★★Click Here
3. American Express Business Gold Card★★★★★Click Here

At a glance: pros and cons of small business credit cards

Let’s first look into the pros & cons of the UK’s top credit cards for small and medium-sized businesses.

Pros 

Applying for a company credit card as a sole proprietor has several benefits:

✅ Payments are quick and simple and can be made online and in person. This eliminates the need to carry cash and also increases the safety of your financial transactions.

✅ You won't be mixing company and personal funds and this can simplify record-keeping

✅ Responsible use of a credit card can help you establish a positive credit profile for your company

✅ Business credit cards are more likely than personal ones to provide perks like travel insurance, air miles, and cash back

✅ Spreading out payments may assist with cash flow and make large purchases more manageable. But if you don't pay off your debt in full each month (unless you're on a 0% APR promotion), interest may be charged to your account.

Cons

Consequences are something else to think about:

❌ Watch out for annual fees

❌ You need to be able to make at least the minimum payment every month (although it's better to pay off more than this)

❌ Having a larger line of credit may make you seem like a higher future risk to lenders

❌ If you are late with a payment or make a payment that is under the minimum requirement, you will be charged a fee and it will negatively show on your credit record for six years.

❌ Credit card companies impose interest on top of your debt if you don't pay off your card every month

How to apply for a business credit card

1. Determine your credit card goals. Do you want a corporate credit card with the lowest possible interest rates and fees, a charge card with a built-in spending tracking system, or a specialist card for a particular purpose, like business travel or rewards?

2. Research providers that offer the type of card you would like

3. Shop around for the best credit card deals. Compare the rates and fees of several credit cards, prioritising those that provide the most value for your business.

4. Fourth, before applying for the card you want, be sure you are qualified to get it by checking the eligibility criteria

5. Gather your documents. Now that you have picked a card and checked you’re eligible, start gathering everything you’ll need to apply

6. Apply for the card. Typically, applications are accepted online, although they may also be received on the phone or in person

7. If you are given a card, you can then start using it responsibly. If you have access to a virtual company credit card, you may be able to begin using it before you physically get your card.

As long as you have a steady stream of revenue from your firm, you may qualify for a business credit card.

Eligibility

In order to apply for a business credit card, you must either be self-employed or the director of a legally recognised company.

In order for the lender to determine whether or not you qualify for their card, you will need to supply information and documentation concerning your finances and credit score (see our list below).

Some comparison sites include free eligibility checkers that do “soft” searches of your credit to discover what credit cards you are most likely to be approved for without negatively affecting your credit.

Unfortunately, similar corporate credit card eligibility checks do not yet exist, but some companies, such as Capital on Tap, do provide “soft” online business credit card eligibility checks.

How to qualify for a small business credit card:

Tips for deciding on a credit card for your company.

The best credit card for your business will depend on the type of business, your financial situation, and credit history. We have picked out out top rewards credit cards but the following are also important to consider:

  • Charges: the yearly fees for many company credit cards can be high
  • APR: this is the annual percentage rate (APR) applied to credit card balances. Keep in mind that only 51% of applicants need to be given the quoted APR, so you may be granted a higher rate if you are considered a riskier borrower.
  • Offers with no interest: purchases, debt transfers, or both may be eligible for a promotional 0% APR period with some business credit cards. If you're just getting your firm off the ground, the option to borrow money without interest might be invaluable but be sure to pay off the bill in full before the introductory APR expires.
  • Rewards: as an incentive for use, many corporate credit cards provide either cashback, airline miles, or rewards
  • Exchange rates: consider using a card that doesn't impose any foreign transaction fees if you often travel for work

Here are some of our top selections 👇:

1. Capital On Tap business credit card: top-rated for small firms

Capital on Tap Business Credit Card

Capital on Tap Business Credit Card
Credit Limit
Up to £250,000
Representative % APR (variable)
35.15% APR
  • Up to 42 days interest-free.
  • Uncapped 1% cashback with no annual fee.
  • Unlimited free company cards.

Representative Example – If you spend £1,200 at a purchase interest rate of 35.15% p.a. (variable) your representative APR will be 35.15% APR (variable). Your APR and credit limit may vary depending on your circumstances.

One of the best business credit cards for small and medium businesses is Capital on Tap.

It was made with small and medium-sized businesses in mind has credit limits of up to £250,000. There are no annual charges (for the basic card) and it also provides cashback of 1% on all purchases.

Why it’s hot

Over 200,000 UK businesses have benefited from Capital on Tap because of its straightforward application procedure and design. It's also popular because the company's qualifying criteria is less stringent than many of its rivals and you’ll get an almost immediate response too.

Capital on Tap customers are automatically enrolled in the rewards programme and get cashback of 1% on all business expenditure, in addition to other perks and benefits designed specifically for businesses. 

You can upgrade to the business rewards programme for £99 a year, and this includes the option to earn Avios miles among other benefits.

What's not ideal about it?

Compared to the business card from American Express, there aren't as manage benefits on offer but it is more flexible when it comes to paying for things as it uses the Visa card payment system.

Pay off your balance in full each month to avoid interest costs, which will outweigh any potential benefits.

Capital on Tap has created a unique card which is well suited to small and medium-sized businesses and providers something a little extra than just a credit card from their regular bank.

How do I qualify for a Capital on Tap card?

You'll need to meet the following criteria for a Capital on Tap credit card:

✔️ You have a turnover of at least £24,000 per year in business

✔️ You and your company have a home in the UK

✔️ Companies House shows that you're open for business

✔️ You have set up shop as either a limited corporation or a limited liability partnership

✔️ Neither you nor your company have any outstanding county court judgments (CCJs; a CCJ is a court order to repay money you owe) from the previous year

But 

❌ You must not be a Royal Charter, trust, charity, or fund. 

❌ You must not be a PLC, which stands for “public limited company”

❌ You can’t be inactive, defunct, or dormant

❌ You can’t be a sole trader

2. Barclaycard Select business credit card: our second best

Barclaycard Select Cashback Business Credit Card

Barclaycard Select Cashback Business Credit Card
Credit Limit
Minimum £1,000
Representative % APR (variable)
27.5% APR
  • Up to 56 days’ interest-free credit when you pay in full and on time.
  • No annual fees for your card and account.
  • Get 1% cashback uncapped on all your business spend.

Representative Example – If you spend £1,200 at a purchase interest rate of 27.5% p.a. (variable) your representative APR will be 27.5% APR (variable). Your APR and credit limit may vary depending on your circumstances.

This credit card is great for business costs because it has no yearly fee and gives 1% cash back on all purchases.

Why it’s liked

The Barclaycard Select cashback business credit card offers one of the best rates of cashback available. It offers a rate that is twice the standard for cards without yearly fees.

Furthermore, you also earn cashback on your regular spending with this card (with a short list of exceptions including items purchased but refunded later, cash withdrawals, and insurance premiums).

Brand-specific discounts from Barclaycard are available in addition to the usual cashback you get. Small business owners typically get preferential treatment, such as reduced rates for airport parking, car rentals, office supplies, dining out, and even access to their company's credit report.

Flexible repayment options may be available with cashback and interest savings. The card also offers an extended interest-free period of up to 56 days for some cardholders.

What we don’t like

To boost your cashback you will need to use the card for all of your regular spending, and then pay it off each month.

If you don't pay off your balance in full every month, you'll end up paying interest which will usually wipe out any benefits of cashback.

A variable rate of around 26% will be applied to purchases if the balance is not paid in full each month; up to 34% will be applied to cash withdrawals; and a rate of 3% will be applied to purchases made in a currency other than the one on which the account is held.

Can I apply for the Select card from Barclaycard?

After researching several credit cards, if you've settled on the Barclaycard credit card you will need to visit the Barclaycard Payments' application portal. Remember that in order to apply, there are certain conditions you need to meet, including being a resident of the UK and at least 18 years old.

3. American Express business gold card: best for rewards

American Express Business Gold Card

American Express Business Gold Card
Credit Limit
None
Representative % APR (variable)
None
  • Annual fee £195 (£0 in the first year).
  • Membership Rewards® points.
  • Up to 99 complimentary Employee Cards.

Turn business purchases into rewards and keep your cashflow flowing.

The American Express company gold card is designed to help small businesses to improve their money management and handling of business expenses.

It can also help with cash flow, and has a range of attractive benefits on offer.

Why we like it 

The main benefit of the card are the Membership Rewards points you can earn on all transactions. There's also a substantial sign-up bonus and new customers can earn 20,000 extra rewards if they are approved for the card and then spend £3,000 in the first three months.

You have the option of ordering more cards if you need them and it does not charge any extra fees for using more than one card at a time.

What’s not to like?

Credit card use requires monthly payments to be made in full. If you do, your purchases will accrue no interest for up to 54 days (but you'll be charged fees if you don't pay off your balance in full by then).

Another common issue is that fact that American Express cards aren't accepted everywhere, so it could be worth having a back-up card (a Visa or Mastercard) to use just in case you get stuck.

There's also an annual fee of £195 (which you won't pay in the first year) to be aware of.

Can I apply?

If you think this card is your best bet, you can apply online. Before you apply though, look through the list of conditions you'll need to meet, including being a UK resident and being aged 18 or over.

How to qualify for a small business credit card

What proof and details must I present?

  • Specifics about yourself and any potential partners in company
  • The company's official name
  • Office location
  • Structure of the company, such as sole proprietorship, partnership, or corporation
  • Phone umber to call for a company
  • Your annual sales 
  • Incurring expenses 
  • Number of staff you employ

Lenders will likely also need details about your company's financial standing, such as how long it's been in operation, its yearly income, total debt, and average monthly costs. You must offer proof such as bank statements and tax returns.

Verifying credit

Your corporate credit record, and maybe your personal credit report as well, will be checked by potential lenders.

You won't qualify for one of the top business credit card offers if you have a low credit score.

There are a few business credit cards available for companies with low or non-existent credit ratings. However, they do not come without drawbacks:

  • 📓 To be approved for some credit cards, you may need to put up collateral, usually in the form of a vehicle or other valuables. If you become too far behind on your payments, the lender might seize these items.
  • 📓 These credit cards will have higher interest rates and fewer features than others

However, if take out one of these cards, clear the card monthly, and do everything you can to improve your business's credit score, you should be able to apply for better credit card in the future.

When will I hear back about the next steps?

Once you make an application, you should expect to hear from the lender within a few days if not before. It will verify the information with you such as the interest rate, credit line, and yearly fee.

Your card(s) will then be sent to you when you agree to the conditions of the card, and you should get them within five business days. Virtual cards, on the other hand, can usually be used as soon as your account has been authorised.

Criteria for obtaining a business credit card 

Lenders all apply their own sets of criteria but most will look at the following things:

  • History of payments (both corporate and personal)
  • Income level
  • How reliable your salary is
  • How successfully you've dealt with debt in the past
  • If your company has applied for credit before

How a sole trader can apply for a credit card 💵

The following information are some of things a credit card provider may need to know if you're a sole trader:

Income verification

Typical examples are financial statements and tax returns. Some providers have a minimum amount you need to earn before they will give you a credit card.

Business qualifications 

As a lone proprietor, you must have a trading name and a unique taxpayer reference (UTR) to do business

Credit reporting

The more established your credit history is, the better your approval odds will be. If you have a good credit score, lenders know you are a responsible borrower who will pay back loans on time.

Qualifying for credit cards as a SMB: conclusion

A business credit card application is more detailed than a personal credit card application, especially if you are a new company with a limited credit history, or if you have a low credit score. 

However, as with credit cards for personal use, it's important to research the market and compare offers, so you can find the best card for your business. It's also essential to read the terms and conditions so you know how much interest will be charged (if any) and you know about any fees that may be applied.

Related Guides:

How to qualify for credit cards as an SMB — FAQs

Can I make a business purchase using a personal credit card?

Who qualifies for SMB credit cards?

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