When you establish a business, start taking steps to separate your company business from your personal accounts. One way is to open a business bank account. Another common action new business owners take is to apply for a business credit account, such as a credit card. Explore the various benefits of opening a commercial credit account.
Applying for Business Credit
Getting a business credit line is very similar to getting a personal line of credit. You must meet the creditor's requirements for credit history and income. When you apply for a business credit account you must provide your company's employer identification number (EIN), as well as information about the company's operations. You may also have to list owner information, including Social Security information and income, to get approved for business credit --- especially in the case of a brand new company.
Cash-flow Needs
One of the benefits of establishing a commercial credit account is that you have funds available to take care of your immediate needs in running the business. It helps you manage cash-flow problems. For instance, when you're waiting for payment from customers, you may experience a stretch of time when cash is tight. Having a business credit line allows you to pay your company's bills and obligations, such as purchasing new products, until you have available cash. You can then pay back the used credit and continue operations.
Business-credit Reporting
Business credit bureaus like Experian Business and Dun & Bradstreet gather and report information about companies the same way that the top three credit bureaus, Transunion, Experian and Equifax, keep information about individuals. When you start a new business credit account, the information is reported on your business credit report. If you maintain a positive payment history, this helps to establish your credit as a business owner.
Business Rewards
When you establish a company credit card account, you can take advantage of rewards programs designed especially for company owners. For instance, some business credit card companies offer discounts on office supplies, rental cars and business travel. Some may offer special business services to companies, like travel booking and invoice processing, as an added benefit.
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