So, you’ve started a new LLC, and you’re interested in getting business credit cards. But, since your business is new, you haven’t established business credit yet. So, what are the most promising cards for you to apply for?
Here, I’ll tell you what cards you might qualify for (along with their requirements), and explain exactly what I would do in your position. As a new business, you don’t automatically have business credit, so you may want to establish it now.
Recommended: Download our Free Business Credit Checklist
Here’s what’s in store:
- What Are Business Credit Cards?
- Best Business Credit Cards for New LLCs
- Corporate Cards to Consider
- Best Loans for New Businesses
- Frequently Asked Questions
- Final Thoughts
Now, let’s roll!
What Are Business Credit Cards?
Before we look at the cards you might qualify for, let’s make sure you’re clear on what you want. More often than not, business owners get other spending cards confused with business credit.
Business credit cards are revolving lines of credit that can be used for business spending. Only a percentage of the total amount spent is required to be paid each billing cycle. Business credit cards accrue debt on any balance left unpaid.
Meanwhile, corporate cards are either prepaid or must be paid in full at the end of each billing cycle. Corporate cards typically supplement robust business expense management software and tools.
So, if you need funding, look at the credit cards below. And, If you need expense management, consider the recommended corporate cards.
Can a Newly-Formed LLC Get a Credit Card?
So, how soon can you apply for a business credit card and do brand new LLCs get business credit?
Getting a business credit card for a brand new LLC depends on factors like the business’s creditworthiness and the personal credit history of the owners. Typically, credit card issuers have a waiting period before a new business can apply, often a few months to a year (but this isn’t always the case).
As a new LLC, it’s important to establish a clear separation between business and personal finances by:
- Obtaining an EIN
- Opening a business bank account
- Maintaining distinct records
The likelihood of approval is higher if the owners have a good personal credit score. As the business operates and builds a positive credit history, it becomes easier to qualify for business credit cards. Check with specific credit card issuers for their policies and requirements.
You might also like: Here’s How to [Actually] Get Business Credit With Just an EIN +More Options
Best Business Credit Cards for New LLCs
Here, I’ll lay out my favorite business credit cards for new LLCs. You’ll see a summary of each offer (why I like it) and how long your business must be in operation before you apply.
If you can’t get a business credit card yet, and you’re in need of immediate funding, scroll down to the loans section. Or, join Business Credit Workshop to learn how to get up to $100K in business credit in as few as 30 days.
1. Chase Ink Business Preferred
The Chase Ink Business Preferred card stands out as one of the top small business credit cards, thanks in part to its impressive sign-up bonus. Although it doesn’t offer a 0% APR and comes with an annual fee, there’s significant potential for savings and rewards. If you believe your business meets the qualifications, I recommend this one.
To qualify for the Chase Ink Business Preferred credit card, you don’t need a specific annual income or business history, but your revenue should cover the minimum monthly payment.
Other requirements include:
- A FICO score of 670 or higher
- A minimum credit limit of $5,000
Chase evaluates your application using your personal credit score, with a recommended FICO score of 670 or higher. Keep in mind that while a good credit score is important, it doesn’t guarantee approval or denial. Whether you’re an incorporated business (LLC, corporation, partnership, non-profit, etc.) or a sole proprietor, you’re eligible to apply for the Chase Ink Business Preferred credit card.
2. Bank of America Executive Explorer
Next, consider looking into the Bank of America Executive Explorer card. Despite its $375 annual fee, the card’s perks more than justify the cost. For instance, you receive a $600 Lounge Access credit annually and a $100 Airport Fast Track credit every four years. Moreover, you gain access to the Benefits on Us and Dinova Rewards programs.
While a new LLC could be approved, it’s important to note that this isn’t a revolving credit line; rather, it functions as a “corporate credit card” that must be paid in full. To qualify, you must be an executive or owner of your company, and while there’s no minimum business history requirement, having an excellent credit score is crucial.
Owners with FICO scores of 740 or higher stand the best chance of getting approved for Bank of America business credit cards.
3. Marriott Bonvoy Business
I believe Marriott boasts one of the top hotel rewards card programs. The appealing part is that while you travel for work, the Marriott Bonvoy Business credit card helps you build business credit. If you meet the criteria, applying for and using this card is a smart move.
Keep in mind that the Marriott Bonvoy Business Credit Card is exclusive to business owners and authorized representatives with a credit score of 700 or higher.
Approval considerations also include factors like:
- Annual income
- Existing debts
Start earning travel rewards on your next hotel stay by applying now.
Corporate Cards to Consider
If you’re looking for a spend card mainly to help with expense management, and you’ve got some revenue to back your account, a corporate card might be a better choice at this point – especially if your LLC is brand new, and your credit hasn’t been established.
Now, my favorite thing about modern corporate cards is that many of them offer cash back on spending (some more than others). So, with these cards, you have a chance to earn on transactions that you or your employees make. Cool, right?
Here are the two cards I would recommend…I’ll explain why.
1. Bill Spend & Expense (Formerly Divvy)
Bill Spend & Expense, formerly known as Divvy, comes with its own set of advantages and disadvantages. If you’re considering whether to take advantage of this offer, reflect on the following questions:
- Is your monthly business spending more than $5K?
- Does your business have multiple staff members with spending privileges?
- Can you pay your expenses in full each month?
If you answered “yes” to these questions, the Bill Spend & Expense card could be an excellent fit for you. Now, to meet eligibility requirements, a business owner must have a minimum personal credit score of 580, and having a score of 640 or higher increases the chances of approval. Additionally, a higher annual revenue enhances the likelihood of approval.
I personally highly recommend checking it out, specifically for the tiered cashback rewards. Sign up on the Bill.com website to find out the credit line you may qualify for.
2. PEX Expense
PEX is another solid corporate card with some cool features, making it a good pick for businesses and nonprofits looking to manage expenses smoothly. It’s got prepaid and dynamic credit cards, throws in 1% cash back, and has a handy app that fits different industry needs.
The user experience is made even better with seamless integrations, virtual/physical cards, and customizable controls, backed by PEX’s positive company vibe.
While PEX is a great choice, if you’re running a startup or an e-commerce gig, you might want to check out alternatives like Brex, Bill Expense, or Shopify Credit that could be more spot-on for your needs. Always a good move to weigh your priorities and compare a few options when it comes to any financial stuff.
Oh, and PEX cards are designed for businesses and organizations, and the cool part is you can get them without worrying about minimum funding requirements—they can even be issued inactive. Nice, right?
Best Loans for New Businesses
Now, if you’re looking for the funding aspect of a credit card, but you haven’t established business credit, you still have options. While your repayment terms aren’t ideal on most of the options available to you right now, you can use one of these offers in a pinch.
Note: I don’t typically recommend factoring-type financing or loan brokers. The problem is that the rates are typically very high. Still, I know that sometimes you gotta do what you gotta do to pay for emergencies to seize an opportunity to grow your business. I have thoroughly reviewed the following loans, and I’ll tell you the truth about them.
Recommended: How to Get an SBA Business Loan
Credibly’s rates, covering everything from interest and factor rates to origination fees and admin fees for merchant cash advances, lean towards the higher side. If your business is on the newer side, your credit isn’t stellar, and you’re pulling in at least $15,000 per month, Credibly might be a viable option for securing the funding needed to keep your business going or expand.
It’s a relatively young company, but it’s legit, with enough satisfied customers indicating it’s doing something right. However, I won’t strongly recommend their loans unless your business is in a tight spot, and if it is, be cautious about the personal guaranty—it can be risky.
Before committing to Credibly or any other company, it’s a good idea to shop around for quotes. You might be able to find comparable loans with better rates, especially if your business is more established or you have a solid credit score.
If you’re in need of working capital or startup funds, and you’ve got solid credit but aren’t in a position for traditional funding options, LenCred could be the solution you’re looking for – It’s especially handy if you’re not keen on unconventional routes like crowdfunding and are okay with dealing with a 9% origination fee.
LenCred’s financing services might just be the boost you need.
However, if you’re aiming to build up your business credit and prefer securing funding without hefty origination fees, LenCred might not be the best fit. Since they don’t use your business credit profile in the funding process, their lenders are unlikely to report to the business credit bureaus. So, it’s a trade-off to consider.
Frequently Asked Questions
What is the fastest way to get business credit for an LLC?
You first need to make sure the owner’s personal credit is in check and the business is properly established for “credit readiness.” Then, open a bank account and establish relationships at the bank. After that, make sure the business has a DUNS number, establish your first tradelines of credit, and pay your accounts at the right time. Finally, you just need to monitor your business credit before you apply for a new loan or line of credit.
Can a single-member LLC build credit?
Yes, a single-member LLC can build business credit with an EIN and a DUNS number.
Can you get a business credit card with no revenue?
The short answer is no. However, there are exceptions, for example, you may be able to get a business credit card with a personal guarantee if your income meets underwriting requirements.
Do LLCs start out with good credit?
What happens if an LLC defaults on a credit card?
If an LLC defaults on a credit card, the creditor can go after business assets, send debts to collections, and sue to liquidate the company. If the credit card has a personal guarantee, the creditor may hold the business owner personally liable to repay the debt.
Now that you’ve explored the best business credit cards for your new LLC, consider all options like the Chase Ink Business Preferred and PEX Expense to find what suits your business needs. Distinguish between business credit and corporate cards, with corporate options like Bill Spend & Expense offering a smooth ride for your expense management.
For loans, check out Credibly and LenCred, weighing perks and alternatives.
Are you ready to learn how to get up to $100K in business credit in as few as 30 days? Join Business Credit Workshop today!