Why You Need a Small Business Credit Card

You may be worried about running up bills on a small business credit card. While learning to spend wisely is important, you should not be afraid of business credit all together. On the contrary, opening and using a small business credit card will provide you with financial advantages as you move forward with your company. Consider these benefits to having a small business card in order to support, expand and keep your business running smoothly.

Build Business Credit

When you first start a new business, you will rely on your personal finances, personal credit and support from your investors to make up your business finances. The sooner your business stands on its own feet, the better off you will be in the long run. Opening a business credit card is a good first step to building business credit outside of your personal credit. 

Make Certain Purchases

There are some purchases you simply cannot make without a credit card. For example, if you have to order materials from overseas, a credit card will be imperative. Business travel arrangements also require a credit card; you will typically have to put a card down to reserve a hotel room, plane ticket or other travel arrangements. It will help you organize your finances and your business to keep all of these purchases on a business credit card rather than a personal card.

Manage Accounts Payable

You cannot always make payments on the goods and services you require immediately. For example, in many businesses, you must first purchase a raw material, refine the material and sell the material before you have a profit. You will then use this profit to pay off the cost of the raw material. The amount you owe for that material, whether it is a physical good or a cost such as Internet or phone lines to allow you to do business, is your accounts payable. With a credit card, you can pay your accounts payable prior to receiving your accounts receivable - the money your clients owe you. You can then use that profit to pay off your credit card.

Survive the Business Cycle

From time-to-time, all businesses will have a slow sales cycle. It is normal to have ups and downs, and the key is surviving the downs. A business without any lines of credit to continue paying bills during a slow cycle may have to close its doors. If you have the ability to make ends meet financially even when you're not selling, you will be able to survive business swings.


It is not enough for a business to simply exist. By expanding, you, your employees and your business will continue to grow in value. You cannot increase your salary or your equity without expanding. But expanding requires the ability to push beyond what you currently earn and do. For this, many businesses rely on credit. A business credit card can be used to purchase new materials, office supplies and more in order to take your business to the next level.

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