Business credit cards for bad credit

Find out how to get a business credit card if you have bad credit, and compare your options below.

If your business has had problems with debt in the past, this guide looks at what options are available to you if you want to get a business credit card with bad credit.

Compare business credit cards for bad credit

Table: promoted then other popular deals
Name Product Purchases Annual/monthly fees Rewards earn rate Representative APR Link Key benefit Representative example
Finder Award
CASHBACK
Capital on Tap Business Credit Card
26.4%
£0
1 point per £1 spent
29.9% APR (variable)
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Earn 1% cashback for every £1 spent. Upgrade to Capital on Tap Business Rewards Card for £99 pa to choose between earning cashback or Avios and receive 10,000 bonus points when you spend £5,000 on your card in your first 3 months.
Representative example: When you spend £1,200 at a purchase rate of 26.4% (variable) p.a., your representative rate is 29.9% APR (variable).
Finder Award
CASHBACK
Capital on Tap Business Rewards Credit Card
26.4%
£99 p.a.
1 point per £1 spent
29.9% APR (variable)
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Earn 1 point for every £1 spent. 1 points can be redeemed for either 1 Avios or 1p in cashback. 10,000 bonus points when £5,000 spent in first 3 months. Up to 20 free supplementary cards available.
Representative example: When you spend £1,200 at a purchase rate of 26.4% (variable) p.a., your representative rate is 29.9% APR (variable).
CASHBACK
Barclaycard Business Select Cashback Credit Card
21.9%
£0
2% cashback
21.9% APR (variable)
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Earn 2% cashback on all spend for the first 3 months. T&Cs apply
Representative example: When you spend £1,200 at a purchase rate of 21.9% (variable) p.a., your representative rate is 21.9% APR (variable).
CASHBACK
Barclaycard Business Premium Plus Credit Card
0% for 6 months reverting to 14.9%
£150 per annum
0.5% cashback
49.4% APR (variable)
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2 complimentary airport lounge passes annually, worldwide travel cover, discounted forex rates plus 0.5% cashback on eligible spend with a cap of 400 per year. T&Cs apply
Representative example: When you spend £1,200 at a purchase rate of 14.9% (variable) p.a. with a fee of £150 per annum, your representative rate is 49.4% APR (variable).
American Express Gold Business Card
N/A (this product is a charge card).
Year 1 - £0, Year 2 onwards - £175
1 point per £1 spent
N/A (this product is a charge card).
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New Cardmember offer: Earn 20,000 Membership Rewards® points when you spend £3,000 in first 3 months of Cardmembership. Earn 1 Membership Rewards® point for every £1 spent thereafter. Earn 10,000 extra Membership Rewards® points when you spend £20,000 per quarter.
Finder Award
OFFER
British Airways American Express Accelerating Business Card
22.2%
£250 per annum
1.5 points per £1 spent
96.7% APR (variable)
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Earn 30,000 bonus Avios when you spend £5,000 in the first three months of Cardmembership. Earn 1.5 Avios for every eligible £1 spent on card and 2 On Business Points for every £1 spent with BA on eligible flights. 10,000 bonus Avios for every £20,000 spent (max £60,000 pa) per calendar year.
Representative example: When you spend £1,200 at a purchase rate of 22.2% (variable) p.a. with a fee of £250 per annum, your representative rate is 96.7% APR (variable).
Barclaycard Select Business Charge Card
N/A (this product is a charge card).
£42 per annum
N/A
3.6% APR (variable)
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NatWest Business Credit Card (only available to existing business customers)
16.9%
Year 1 - £0, Year 2 onwards - £30 per annum
N/A
24.3% APR (variable)
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Representative example: When you spend £1,200 at a purchase rate of 16.9% (variable) p.a. with a fee of Year 1 - £0, Year 2 onwards - £30 per annum, your representative rate is 24.3% APR (variable).
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Can I get a business credit card with bad credit?

Yes, it’s still possible to get a business credit card if you have bad credit, but you may find your options are more limited compared to someone with good credit. This can mean that some card issuers won’t be willing to offer you their cards, while others will, but with a higher interest rate than the advertised representative APR and/or a lower starting credit limit.

Should I get a business credit card with bad credit?

Business credit cards can be extremely useful tools for business owners looking to better manage their finances.

Used carefully, a credit card is very often the cheapest way to borrow money over short periods – beating factoring by a country mile, for example. Like consumer cards, business credit card typically give you “up to 56 days” interest-free on your purchases, provided you clear your balance in full each month. So if you buy something on the first day of the month, get your statement and bill at the end of the month, then clear your balance on the due date a couple of weeks later, you’ve effectively borrowed money from your card issuer for as much as eight weeks without paying a penny in interest.

Providing a business credit card is used sensibly and repayments are made on time, they can also help your business to turn its credit score around, which could give you access to better deals in the future.

Some potential upsides

  • Those “up to 56 days interest-free” mean you have powerful payment flexibility, potentially at no cost. That can be incredibly useful if you don’t know exactly when your invoices will be paid – leaving you with an unpredictable cashflow.
  • Credit cards can help you manage business and employee expenses – you might want to set individual credit limits, for example, and see where your staff are spending money.
  • Make repayments on time and you can improve your business’s credit score, making it easier (and cheaper) to borrow money in the future.
  • If you’re going to be spending this money anyway, then you might be able to earn some cashback, air miles or reward points along the way.
  • If your company makes purchases in other currencies (perhaps if there’s a bit of travel involved), then some business credit cards could offer you commission-free currency conversion.

Some potential downsides

  • If you only repay the minimum amount each month, it can be a very expensive way to borrow. Don’t forget that your interest rate will almost certainly be tailored to you and your company (so with bad credit, it’s likely to be higher that the rate the bank advertises).
  • If you miss payments or go over your limit, you could damage your credit score further.
  • Because credit cards generally aren’t secured against assets or invoices (although they may involve a personal guarantee), the amount you can borrow with bad credit is likely to be less than with, say, asset finance.
  • Unlike a fixed-term loan with a defined end-date, credit cards are open-ended, and could present a temptation to spend when you otherwise might not have.

“Representative APR” vs personalised APR with bad credit

Card issuers only have to award their advertised “representative APR” to 51% of those who take out the credit card – the other 49% could be offered a different (higher) rate, especially if they have poor credit. Here’s an example of a fairly standard representative APR vs a higher, tailored APR that a bank might offer to a company/individual with a low credit score.

Representative APR and typical credit limit
  • Credit card limit: £25,000
  • Outstanding balance: £3,000
  • Interest rate: 21.9%
  • Borrowing £3,000 and repaying over 6 months would cost £532 each month and £3,195 overall.
Tailored APR and credit limit
  • Credit card limit: £10,000
  • Outstanding balance: £3,000
  • Interest rate: 34.9%
  • Borrowing £3,000 and repaying over 6 months would cost £552 each month and £3,313 overall.

However, if you pay your balance off in full each month, you’ll usually pay no interest at all – regardless of your credit rating.

Will my personal credit score be checked for a business credit card?

Potentially, yes. If you’re a sole trader, lenders will look at your personal credit score to determine your creditworthiness before deciding whether to let you borrow.

However, if you’ve set up a limited company, you will have both a business credit score and a personal one.
These are completely separate but work in a similar way. If you’re applying for a business credit card, lenders will use your business credit score to determine whether they are happy to let you borrow – just as your personal credit score would be used if you were applying for consumer credit.

Your business credit score can affect the amount of interest you pay, how much you can borrow and whether you’ll get accepted for credit at all. The higher your score, the more likely you are to get accepted, the more you’ll be able to borrow and the better the rate of interest you’ll be offered.

In some cases, lenders will look at both your business credit score and your personal one to establish your creditworthiness. This will often be the case if your business is new and has yet to build up its own credit rating. Lenders may also want to see your estimated turnover, along with copies of bank statements and business plans before agreeing to let you borrow.

Note that if your company has multiple directors, any one of them could potentially affect your company’s ability to get credit. So it’s worth every director checking that their credit score is up to scratch before applying.

If your company is accepted for a business credit card, making your repayments on time and staying within your credit limit can help your business to boost its credit rating which could give you access to better deals in the future.

Image of cashier and woman with caption 79% of SMEs in the UK are approved for the credit cards they apply for.

Bad credit vs limited credit

Although both can affect your business’s ability to get accepted for credit, there is an important distinction between bad credit and limited credit.

If your business is just starting out and you’ve never borrowed before, your business is unlikely to have much of a credit history. This limited credit can make it difficult for lenders to assess your company’s creditworthiness, which is why they may turn to your personal credit history instead.

In comparison, if your business has bad credit, this means it does have a credit history but that mistakes have been made. Bad credit could be caused by failing to pay bills and invoices on time, missing credit repayments, failing to file business accounts on time or exceeding overdraft or credit card limits.

Bad credit can make it much harder to get accepted for credit again in the future, and it can be worth taking steps to improve your business credit score before making further applications for credit.

How do I apply for a business credit card?

You can shop around for a business credit card in the same way as a personal credit card. To do this, you’ll need to compare factors such as:

  • Interest rates
  • Fees
  • Rewards and benefits
  • Credit limits
  • Whether you can have additional cards for employees
  • Budgeting and accounting features
  • Basic eligibility criteria

Unfortunately, while many lenders offer eligibility checkers for personal credit cards, they are far less common for business credit cards.

No credit cards offer a 100% guarantee you’ll be accepted, but eligibility checkers show you which credit cards you’re most likely to get accepted for without affecting your credit score. This is because they involve a “soft” search of your credit file. A soft search is different to an application for credit – where lenders will run a full, “hard” search of your credit file.

You can usually apply for business credit cards online, by phone or, in some cases, in branch.

Eligibility requirements

As well as a good credit score, many business credit cards will require a minimum annual turnover and a minimum trading history. You may also need to already have a business bank account with that particular provider.

Some business credit cards will also only be available to those who have no bankruptcies or County Court Judgments. And some card issuers will only offer credit cards to limited companies rather than sole traders.

What is a personal guarantee?

If you’re a small business with very limited trading history or credit history, some credit cards will require you to sign a personal guarantee before you can qualify for the card.

This means that you agree to be personally responsible for any debt you accumulate on your business credit card. Personal guarantees are less than ideal – as a rule of thumb you shouldn’t mix up your personal and business finances. However, in some cases they are a necessary evil.

A personal guarantee won’t usually appear on your credit file and won’t impact your credit score, provided you use the card responsibly.

How do I get a business credit card if I have bad credit?

There are a number of things you can do to improve your chances of getting approved for a business credit card if you have bad credit:

  1. Don’t apply for many credit cards at the same time. This is only likely to damage your credit score further. Only apply for one credit card that you’re confident you can be approved for instead. If you’re refused, give yourself a few months before trying again. Most “hard” credit checks, like the ones that are carried out when you apply for a credit card, stay on your credit report for 12 months.
  2. Work on improving your credit score. Take steps to improve both your personal and your business credit score. This is easier said than done, but there are a few simple things that can help, from paying bills and invoices on time to asking your suppliers to share payment data with the credit reference agencies. You can learn more on your business credit score and on your personal credit score in our comprehensive guides.
  3. Consider a card with a personal guarantee. It can be worth doing this for a short time and then switching to a business credit card that doesn’t require a personal guarantee once your business credit score has improved.
  4. Consider a credit builder credit card. Some business credit cards are designed specifically for those looking to build their credit score. However, credit limits tend to be low and interest rates high, so it’s important to clear your balance in full every month. When used responsibly, a bad credit credit card can help your business to improve its credit score and get accepted for better deals in the future.

What are the alternatives to business credit cards for bad credit?

If you can’t find a credit card that works for your business, you can consider other business finance options. Secured forms of finance (such as invoice finance) are more likely to be available to people with bad credit because the risk is lower for lenders. Have a look at business cash advances too.

Bottom line

If your business has a poor credit score, it’s important to take steps to improve it before applying for a business credit card. When applying, always check eligibility criteria carefully and once accepted for a card, be sure to make your repayments on time and stay within your credit limit. Using your credit card responsibly will help to increase your business credit score over time.

Frequently asked questions

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