Taking on a customer with no credit can be risky for a credit card provider since they have no real indication of what type of borrower you are. Most small business credit cards require a credit check, with providers looking for you to have a good personal or business credit score in order to be eligible for the card.
If you don’t have personal or business credit or you have poor credit, you may struggle to get an unsecured business card since there aren’t any “bad credit” or “no credit check” cards on the market – but you’re not completely out of options.
If you have no personal or business credit, your best options are:
Applying for a credit card with a guarantor, joining on as an authorized user with a business partner, or choosing from the tiny market of secured or prepaid business cards. You could also turn to an alternative form of business funding such as a loan, line of credit or a startup grant.
If you don’t have a business credit score but you do have a good to excellent personal credit score:
You could qualify for a powerful unsecured business credit card since many lenders will turn to your personal credit score to assess your risk as a borrower.
How to get a business credit card if you have no or low credit
If you’re worried you can’t get a business credit card with no credit history, first be clear on which type of credit history you don’t have.
Without a business credit score, you can likely still get an unsecured business credit card – but it will depend on your score. The provider will look at your personal credit score when deciding whether to approve you or not.
If you don’t have a personal or a business credit score, it’s more difficult to get approved for a business credit card. The provider won’t be able to assess your risk as a borrower, which may result in a rejected application. If you have neither personal nor business credit, consider these options:
Explore an option that doesn’t require you to have a business credit score. Some providers may not require you to have business credit to apply for a business credit card, and instead they will use your personal credit as an indication of your risk. Before applying, contact the provider directly and inform them of your situation. They will likely be able to give you an idea whether you could be approved for a credit product or not.
Get a business partner to apply for a credit card. If you have a business partner, they can add you as an authorized user on the account, or you can use them as a guarantor to get your own card. You can build your own credit using these options, however your business partner will ultimately be liable for any balances left unpaid on the card.
Apply for a secured or prepaid business card. A couple of banks, such as TD and BMO, offer a secured and prepaid business credit card respectively. With no credit, you can typically expect a higher approval rate with these card types.
Do your everyday business banking with the same provider. If your small business already banks with a provider, you may be able to apply for a credit card with them. Since you’re already a trusted customer, they may be more lenient when it comes to applying for an unsecured business credit card.
Consider alternative business funding. If you don’t have a business partner or a guarantor, or you can’t find any providers willing to work with you, you can turn to an alternative type of business funding. Alternatives may include small business grants, loans and a line of credit. The great thing about using an alternative like a loan or line of credit is that you can use this product to build your personal and/or business credit score. By making timely repayments, you’ll begin to build your credit score in no time.
Apply for a personal credit card first. If you have a sole proprietorship, you may be able to get by with a personal credit card. Finding a personal credit card that you’re eligible for with no credit is usually much easier than finding a business credit card. By using a personal credit card, you can build up your personal credit score by making timely repayments and maintaining a good credit utilization ratio. After several months, you may have enough credit to apply for a business credit card.
Compare credit cards for small businesses
1 - 9 of 9
How to compare business credit cards
Set on applying for a business credit card? If you have no credit or a poor score, consider the following factors when choosing the best card for your needs:
Annual fee. There are a couple of business credit cards on the market that charge no annual fees, while cards that charge an annual fee tend to sit between $50 to $499. Cards with higher annual fees usually come with stronger perks and rewards, so consider the features that you’ll actually use before paying a hefty annual fee.
Interest rates. Most business credit cards have standard interest rates around 19.99%. In addition, some American Express business cards are charge cards, which means you’ll need to pay off your balance in full each month. If you tend to carry a balance from month to month or you have an unpredictable cash flow, a regular credit card will be a much better option.
Credit limit. Business credit cards typically have higher credit limits than personal credit cards. If you’re approved for a credit card and have no credit score, you’ll likely be assigned a low monthly credit limit. Once you make timely repayments, you can always request an increase on your credit limit should you need it.
Rewards. Some business cards will offer accelerated rewards points, cash back or miles when you spend in specific categories such as office supplies or gas. If your business spends evenly across many spending categories, you might prefer a flat-rate rewards card.
Employee cards. Some providers offer free employee cards, while others charge for them. You may also be able to access business tools that allow you to limit and monitor your employees spending.
If you’ve got a good personal credit score but no business credit, you will have an easier time getting approved for a business credit card. However, if you don’t have a personal or business credit score, your options may be limited to applying with a guarantor or a business partner, getting a secured or prepaid card, or turning to another type of business funding such as a loan or line of credit.
If you run a small business or have a sole proprietorship, you may prefer to apply for a personal credit card first to build up your score and then graduate to a business card at a later date.
No, you typically need a Social Insurance Number (SIN) to apply for a credit card.
It depends on the provider. Some providers will report to both the business and personal credit bureaus if you have a business card, while others will report only to the business bureaus. If you’re personally liable for your business credit card – which is usually the case – your personal credit can be severely impacted should your business fail financially.
The most effective ways to build business or personal credit are to consistently make on-time payments and keep your balances low. There are other factors that will affect your credit such as how long you’ve had credit products for and the variety of products that you have.
A credit utilization ratio compares the amount of credit that you’re using to the total amount of credit that you have access to. For example, if you have two credit cards with a credit limit of $5,000 each (a total of $10,000 together) and you’ve spent $1,000 on each card (a total of $2,000), your utilization ratio will be calculated as:
2,000/10,000 = 20
Your credit utilization ratio is 20%.
A healthy credit utilization ratio is typically 30% or less.
Emma Balmforth is a producer at Finder. She is passionate about helping people make financial decisions that will benefit them now and in the future. She has written for a variety of publications including World Nomads, Trek Effect and Uncharted. Emma has a degree in Business and Psychology from the University of Waterloo. She enjoys backpacking, reading and taking long hikes and road trips with her adventurous dog.
How likely would you be to recommend finder to a friend or colleague?
Very UnlikelyExtremely Likely
Thank you for your feedback.
Our goal is to create the best possible product, and your thoughts, ideas and suggestions play a major role in helping us identify opportunities to improve.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.