One way to obtain a business credit card is to find a lender that offers such financing, then arrange for the repayment of the credit to be made directly from the lender. For this option to work, there are a number of things the business owner should consider. They include finding a lender with reasonable interest rates and fees, as well as one that doesn't have an unusual fee for obtaining business credit. If a business credit card is being obtained in this fashion, it will be useful to know what all types of charges will be made against the company's funds.
First, it is important to know how much of a business can be funded by business credit. This is because lenders will typically provide a line of credit based on the amount of capital available to the company. Lenders understand that a business' capital is often long-term in nature and may not be appropriate for short-term needs. As such, they generally limit business credit lines to no more than about twenty thousand dollars at a time. Still, when a company has access to this type of financing, it may allow it to make purchases at locations the company currently provides services at and give employees pay raises as needed.
Another way to get a business line of credit is to have an internal-use credit card. An employee or manager may carry one on their person at all times. This will give them the capacity to purchase items that the company uses on a regular basis, such as office supplies. The downside to this method is that these items may not be used to make purchases, such as items needed for the company's operations. This is because a company's cash flow may be poor and therefore, these purchases may be held until the company can come up with the money to make them. If an employee or manager does not use the card for routine purchases, it may also show up on their personal credit report, which could hamper future attempts to get credit in other ways.
Another potential way to obtain business credit without PG is to request an unsecured business loan from a bank. Banks that do business with small businesses will typically be able to provide this type of financing. The down side to this method is that many banks view small business owners as high-risk customers. The bank may require the business to secure its own credit by providing collateral or by paying a large deposit, which limits its usage.
A third way to get business credit without PG is to obtain financing from suppliers. This is often times accomplished by having a supplier makes an equity investment in your business. In return for this equity, your business will receive financial backing that usually will be provided by a percentage of the gross sales of your business. This option has significant advantages to business owners. First, it eliminates the need for a personal guarantee from suppliers, which eliminates the possibility of non-payment, which could damage a business's credit rating.
Still another option to obtain business credit without PG is to establish credit cards and use them for purchases. The credit card company that issues the credit will report all business purchases to the credit bureaus, allowing them to report your ability to pay on time as . . . . . . well as any credit balance that you may have. It may be tempting to use the credit cards to purchase too much of a good thing that others may consider expendable, but that can create a bad impression for your business. You may also want to limit purchases to what can be paid off quickly, which may be determined by how well your business earns per month.
A fourth and final way to obtain credit without PG is to apply for secured loans from banks or other lenders. For those who have excellent credit ratings, there are several lenders who do not base their lending decision on business credit history. These lenders may approve business loans without a PG or higher. These loans carry a higher interest rate, however, since they are considered unsecured loans. If you need a larger amount of money than can be paid back in a short period of time, this may not be a viable option for you.
There are many ways to get business credit without a PG or higher. However, you should use caution when applying for unsecured business loans. Ensure that your business has excellent credit before applying for a loan so that you can ensure that you will not be turned down because of a poor business credit rating.