6 reasons to get a Credit Card for your Business
The growth of a cashless society has not slowed down, which, has created a form of financial brace for a lot of businesses. There are now so many respectable companies that offer credit card options, allowing you to go cashless, even for smaller purchases. With the implementation of contactless, we can now complete small purchases up to £30, without needing to enter our pin, but wirelessly tap our cards to process payment. Being cashless allows you to make payments to your suppliers, both on or offline while offering a lot of other benefits. Here are 5 reasons why you should consider getting a credit card for your business.
Protect your Finances
While your business grows, you may experience low cash flow, due to lack of sales. Having a business credit card will allow you to continue processing payments - acting as a financial cushion until sales pick up again. A business credit card offers you the sort of spending power you need to keep running your business, during times of financial crisis. It could sometimes, mean the difference between operating or closing down.
Building your Credit History
A business credit history is just as important as a personal one. Any business owner will tell you that applying for a loan from a bank, for example, can be quite arduous without a good credit reputation to back you up. Every bank wants to see that you can manage your money well and will require proof of this, which is where a business credit card will come in quite handy. Although a bank loan is a great way to secure the money you need to scale, expand or perhaps create more stock to sell, credit can be quite rigorous to achieve. Credit cards, on the other hand, can offer an easier alternative to bank loans, without the need to display financial security before you are given credit.
Better Accounting Practice
Being able to separate your personal from your business expenses will give you a clearer view of how your business is functioning. This is incredibly beneficial when it comes to sorting out your tax and accounting for each period. Your business will need to continuously keep and show its accounting records, to easily track growth and possibly in the case of an audit.
Having insurance and purchase protection comes as standard with most credit cards. Allowing you to have free purchase protection for a specific period. This means you will receive compensation just in case what you’ve purchased gets lost or stolen – as long as the time frame fits within the specified period. It’s a great benefit to have and it will protect both you and your business against fraud.
Bonuses and Discounts
Each credit card carries its own bonuses and discounts, that you can benefit from. This, of course, depends on the type of credit card you prefer. Choosing the right one for your business is very important, so you may want to take some time to evaluate their suitability for your business and what one will save you the most money in the long run.
Credit cards have a lot of benefits attached to them, but there should always be caution taken when using one. You will need to look into interest rates and benefits along with any assurances for your business. Treat the credit card as a loan that you need to repay and if you can repay the balance at the end of every month, that will work wonders towards building your credit history. It is a great asset to any business but should be given great thought.