Obtaining Business Credit Cards, Its Harder Than You Think

Most small business owners believe that obtaining a business credit card is as easy as having good FICO scores and applying online. In some cases they are correct, but in most cases they are very wrong.

Applying for business credit cards without knowing what you are doing can damage your personal credit, get you declined, and make it impossible to get approval at other institutions for 6 months to a year. Why is that?

Currently there are about 30 banks and credit unions that are actively involved in issuing business credit cards. Each of these lenders has a different set of guidelines for approval, but there are a few underwriting items that hold true for almost all of them.

The first is debt utilization. These lenders want to see that your current debt utilization for all existing revolving accounts is less than 40% current account balances to your maximum approval limits. In simple terms, if you have $10,000 in total limits from 3 credit cards, they want to see that no more than 40% of $4,000 has currently been used. If your debt utilization is greater than 40% you will most likely be declined.

Second is do they have a personal relationship with you. Let’s face the facts, all these credit card providers want your personal business because that is where the higher limits are and that is where you are more likely to use the cards more often.  While some of these lenders will approve you for a business credit card, your approval limit will be much lower than if you already have a personal credit account with them.

Chase for example provides excellent terms and credit approvals for their personal credit cards. Once those are approved you can wait just 48 hours and apply for the business credit cards for which you are likely to see approval limits of double what you might have received without having the personal cards first. So the funny thing is that if you applied for just the business card you might have received an $8,000 approval. But by applying for the personal cards first you may have gotten approved for a total of $25,000 or more there and then the business approval comes in at $16,000 or more. Therefore instead of only $8,000 you may have obtained $40,000 in approvals from the same financial institution. All of which could be used towards supporting your business.

The bottom line is that applying for credit cards in general, for use in your business, is a very detailed process with a lot of moving parts. There is far more to it than simply FICO scores and online applications. What you as a consumer most likely do not know is that the first part of the approval process is all automated and completed computer to computer. You apply online via your computer and their computers start checking many other computers to determine the automated approval or decline decision and assign the credit limits based solely on what gets returned from those other computers. If you are a normal consumer once that happens you are done.

But the process is actually very far from being done. The next step is what is called the credit reconsideration lines. These allow you to connect with a live person and request that a live underwriter review your account to determine if the assigned credit limits can be increased. As with any live process, the underwriter will want to know why and what the increases will be used for. If you know the proper answers then many times credit limits can be increased manually from 25% up to 100%. We have even seen declines reversed for up to $20,000 in approvals. Most consumers have no idea these live person reconsideration lines exist and even if you did, you would have no clue as to how to most effectively utilize them.

Many lenders specializes in the placement of Unsecured Business Financing or UBF. Here we work with over 30 different banks and credit unions to maximize your approval limit opportunities.  The average per principle funding approval amount has been $108,000. The approvals are available to any business, startup or established does not matter. The approvals are based on the principal(s) of the business and not on the business itself, therefore if the business has four (4) principals it may be possible to obtain $400,000 in financing.

The process of finding out if you pre-qualify is a simple as contacting them to find out. There are no upfront fees and your only payment for the success in funding obtained on your behalf can be paid from the new credit lines that have been obtained for you so there is absolutely no risk to you and nothing to lose.