Business Credit Cards for Bad Credit

Business Credit Cards for Bad Credit

Business Credit Cards for Bad Credit

Business credit cards offer small business owners access to a flexible line of credit along with a convenient and safe way to pay for business expenses. Many offer cash back rewards and other perks. But if your credit scores aren’t high you may find it more difficult to qualify. Here we’ll discuss credit cards for bad credit.

In a Federal Reserve Bank of Chicago study, over 97% of businesses with poor or below-average financial health were unable to access traditional business bank loans or financing, so it’s no surprise that many business owners look to credit cards or lines of credit to access working capital. Secured business credit cards or small business credit cards for poor credit can be good options for business owners with poor or fair credit who need a small amount of capital now. Even with a low credit limit, these cards can help you build business credit.

First, let’s clarify what qualifies as “bad” credit. Most business credit card issuers require good to excellent credit. That often means a 680 FICO score or above. A few, however, are more flexible and may allow personal credit scores in the mid-600s or lower. There are limited business credit card options for business owners with bad credit, so we’ve included credit cards for fair credit here as well.

The Best Business Credit Cards for Bad Credit

Here are credit cards to consider if your credit scores are less than perfect:

Best credit card for limited credit: Capital One® Spark® 1% Classic for Business

The Capital One® Spark® Classic 1% for Business is a popular card for those with less than perfect credit.

Pros:

  • Unlimited 1% cash back on every purchase with no minimums or expiration date
  • No annual fee

Cons:

  • High interest rate

The Capital One® Spark® 1% Classic for Business may be a good fit for businesses that want to build credit. Benefits include 0% fraud liability protection, no foreign transaction fees, free employee cards and no spending limit.

*All information about the Capital One® Spark® 1% Classic for Business has been collected independently by Nav. This card is not currently available through Nav. To see what business credit cards are available, please visit the Nav Credit Card Marketplace.

Best credit card for fair credit: Capital on Tap Business Credit Card

The Capital on Tap Business Credit Card is a solid unsecured business credit card with rewards, and may be available to those with fair credit.

Pros:

  • Soft inquiry
  • Cash back rewards

Cons:

  • APR may be high (based on credit history)

Capital on Tap Business Credit Card offers credit limits ranging from $1,000 up to $50,000. This card also offers an attractive rewards program: 1 - 2% unlimited cashback with no annual fee. 1 – 2% unlimited cashback with no annual fee.

APRs ranging from 9.99% – 34.99% Variable depending on credit scores. Personal guarantee required.

Secured Business Credit Cards

A secured business credit card is another option for business owners with bad credit. These are much easier to qualify for than unsecured credit cards. A secured card requires a cash deposit to be held as a security deposit. (Typically you’ll get it back when you close the account.) This is a way for credit card companies to minimize the risk of a high risk borrower. Secured cards usually allow borrowers to charge up to the amount of their security deposit, though some will let your balance exceed your credit limit if you manage it responsibly.

Best low-cost secured card: Wells Fargo Business Secured Credit Card

The Wells Fargo Business Secured Card is a low-cost business secured credit card with an option to graduate to an unsecured card.

Pros:

  • Rewards: Choose between cash back or rewards points.
  • Low interest: Prime rate + 11.90% APR on purchases
  • Build business credit: Wells Fargo reports your payment and usage behavior to the Small Business Financial Exchange.

Cons:

  • You must open a Wells Fargo business checking or savings account prior to applying.

The Wells Fargo Business Secured Credit Card allows cardholders to secure a credit line between $500 – $25,000, depending on how much you are willing to deposit. With this card, the amount of your credit line is equal to the amount you deposit. There is no annual fee. And best of all, you may be eligible to upgrade to an unsecured credit card over time.

This card offers a choice of rewards:

  • Cash back: 1.5% cash back on eligible purchases or
  • Points: 1 point on every $1 spent and receive 1,000 bonus points every billing cycle when you spend at least $1,000 on qualifying purchases 1 point for every dollar spent:

*All information about the Wells Fargo Business Secured Card has been collected independently by Nav. This card is not currently available through Nav. To see what business credit cards are available, please visit the Nav Credit Card Marketplace.

Best personal secured card: Citi® Secured Mastercard®

While the focus here is on business credit cards, a personal credit card may help you build credit if used properly.

Pros:

  • On time payments can help build credit
  • Access to your free FICO score online

Cons:

  • No rewards or intro offer

The Citi® Secured Mastercard® is a no annual fee credit card that can help with building credit when used responsibly. A security deposit (minimum of $200) is required. Once approved, your credit limit will be equal to your security deposit. With Citi’s Flexible Payment Due Dates, you can choose any available due date in the beginning, middle or end of the month, then manage your account 24/7 online, by phone, or in the mobile app.

What does it take to qualify for a business credit card with bad credit?

There are two primary qualifications most business credit card issuers consider:redit 

  1. Credit
  2. Income or revenue

Credit: In most cases, a personal credit check will be required— even for business credit cards. It’s a good idea to check your credit reports and scores from the major consumer credit bureaus— Equifax, Experian and TransUnion— so you understand your creditworthiness. (There are more than 138 places to get your credit score for free.) This can also help you identify problem areas in your credit history where your credit can be improved. For example, high debt utilization is often a problem for consumers and business owners. If your debt ratio is too high, it could be weighing on your scores, and you’ll want to focus on paying down those balances.

In addition to minimum credit score requirements, some issuers will not approve your application if you have too many recent inquiries, high balances on other credit cards or no credit history.

Income: Issuers will often have minimum income requirements (and they may not disclose those) but the good news is that most will allow you to include income from all sources and not just the business. That means these cards may be available to startups as well as more established businesses.

Line of Credit by OnDeck

OnDeck offers business term loans up to $500,000 and business lines of credit up to $100,000 to Learn More

How to apply for a business credit card with bad credit

Unless you get appealing credit card offers in the mail, you’ll most likely shop for a credit card online. Most issuers make it easy to apply online and get a decision very quickly. You’ll want to have the following information handy when you apply:

  • Your Social Security Number
  • Employer Identification Number (EIN) or Taxpayer Identification Number (TIN)
  • Business information: address and phone number

Note while a few issuers require you to have a formal business entity (such as an LLC or S corp) to apply for most business credit cards, in most cases these cards are also available to sole proprietors, independent contractors and freelancers.
If you get rejected for a card you want, you may want to reach out to the card issuer. Some have a reconsideration department that will review your application to determine whether there are other factors that may help you qualify.

Can I use my EIN to get a credit card?

If you have an employer identification number (EIN) you may need to supply it when you apply for a small-business credit card. But you will almost always need provide a Social Security number as well.

How to get a business credit card with bad credit

The most important thing to keep in mind when you apply is to narrow your search to cards for which you are most likely to qualify. Applying for multiple cards in a short period of time can result in multiple credit inquiries on your report. These can impact your credit scores, so be careful to apply for cards for which you’re more likely to get.

If you get a business credit card, try to use it for business purchases so you can separate your business and personal finances. This will make it easier to keep track of your business spending for tax purposes.

Alternatives to business credit cards for bad credit

While many traditional small business loans (such as bank loans or SBA loans) require good credit, there are some types of business financing that may be more credit flexible or may not check personal credit at all. While there are some business loans for bad credit these financing options tend to be focused on other factors such as revenues or time in business. They include:

  • Vendor accounts
  • Online loans
  • Business cash advances
  • Crowdfunding

For the above types of financing, revenues may be more important than credit history. A business bank account may be required so make sure you open and use one as soon as possible.

This article was originally written on May 10, 2018 and updated on September 3, 2021.

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ABOUT AUTHOR

Gerri Detweiler

Education Director for Nav

Gerri Detweiler is Education Director for Nav. Known as a financing and credit expert, she has been interviewed in more than 4000 news stories, and answered over 10,000 credit questions online. Her articles have been widely syndicated on sites such as MSN, Forbes, and MarketWatch. She is the author or coauthor of five books, including Finance Your Own Business: Get on the Financing Fast Track. She has testified before Congress on consumer credit legislation.

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9 responses to “Business Credit Cards for Bad Credit

  1. Have A LLC Business but have bad credit Personally.. What can I do to establish credit for my business?

  2. You’re website needs to re-adjust your scoring because you claimed I had a 90% approval factor with capital one, I had two cards with them for which I had opened and paid perfectly until I realized they never increased my credit Limit levers 5 months like they state. But must’ve fell in a 10% factor due to their decline notice for their ridiculous 25.99% APR Spark Card.

    1. We’re so sorry to hear you were turned down for the card you wanted. We are continually working with our issuer partners and technology to try to provide our customers with better insights through MatchFactor. We’ve found that our customers who use MatchFactor are 4 times more likely to be approved for a small business credit card but we’d like to increase that even more! We’re also working with some issuers to be able to provide full pre-approvals. We appreciate your feedback.

    1. Can you please tell me when can I got a secured business credit card? Thanks.
      I also like to know if you repair credit too ?
      I love your website ,
      best regards

      1. There aren’t many issuers offering secured business credit cards, however, you can try Wells Fargo (apply in a branch). You may also want to consider vendor accounts that don’t reply on personal credit. You can learn more at Nav.com/vendors.

        We are not a credit repair firm; however you can find a referral to one in the Nav Marketplace. (Scroll down to credit repair.)

        Thanks for the kind words!