Business credit cards with no credit check?

If you’re starting a new business and have no business credit history or your business has a dodgy credit score, you might wonder if any providers offer business credit cards with no credit check. Here, we look at the options available to you.

Can I get a business credit card without a credit check?

No, you can’t get a business credit card without undergoing a credit check first. Credit card providers must make sure they lend responsibly – so your credit report will be assessed. There’s no getting around it.

However, there are steps you can take to give yourself the best chance of being approved for a business credit card, even if your credit rating is poor. Take a look at your options, and then you can spend less time worrying about your credit score and more time doing what you do best: running a successful business.

How do lenders assess business credit card applicants?

When you apply for a business credit card, lenders always assess your business credit score and report. They’ll want to see how well you have managed credit in the past and whether you have any history of missed payments. This helps them decide whether to lend to you and what credit terms to offer you. That means things like your credit limit, interest rate and any interest-free periods. The better your credit scores, the better the deal you’ll likely be offered.

However, in some cases, they also check the business owner’s personal credit score. This is common when your business is new and doesn’t have much trading history to assess.

On top of this, lenders will also want to check financial documentation like your bank statements. They’ll want to assess whether your business has positive cash flow and can repay its credit card debt.

To improve your chances of being approved for a business credit card, you’ll want to take steps to improve both your business and personal credit scores. You can do this by ensuring all debt payments are made on time, keeping your credit utilisation low, and correcting any errors on your credit reports.

How to improve your chances of being approved for a business credit card

The best thing you can do is take steps to improve your credit score. However, you can also check your eligibility for the following types of business credit cards for which you’re more likely to be approved, even with a bad credit score.

• Credit cards with a personal guarantee. If you sign a personal guarantee, you’ll be personally liable for repaying the debt if your business can’t. This provides extra protection for the lender so they feel more comfortable approving your business credit card application. But you’ll be taking on personal risk. If your business can’t repay its debt, you might compromise your savings or even end up with a personal bankruptcy on your credit report for 6 years.
• Secured business credit cards. With this type of card, you pay a deposit that the card issuer holds until you return the card. This is another form of protection that can help lenders feel more comfortable approving your application. However, although this form of credit card is popular in the US, it’s quite rare in the UK.
• Bad credit business credit cards. There is a specific market of business credit cards aimed at companies with poor credit scores. However, these cards tend to have high interest rates, low credit limits and strict terms. You may prefer to build your credit score instead of applying for one of these. Read our guide to business credit scores for tips on how to build business credit history.

Eligibility checks vs full application

Many business credit card providers offer an eligibility checker tool on their websites. These require you to fill in a few financial details to see whether you’ll likely be accepted for a specific credit card.

The most useful thing about these tools is that they only run a “soft check” of your credit report, which doesn’t affect your credit score. A “hard check” of your credit report produces a temporary dip in your credit score.

If you’re approved by an eligibility checker, you’ll still have to make a full application. This includes a hard check of your credit report. It’ll also require more information, and you could still be declined based on these additional details.

Still, assessing the likelihood of being approved for a credit card before you make a full application can reduce the chances of being declined several times and protect your credit score.

Dos and don’ts

What if I’m turned down for a business credit card because of my credit score?

You still have a few options available to you at this point. The best one for you depends on the reason you wanted a business credit card in the first place.

• Do you need the flexibility to manage your cash flow while waiting for invoices to be paid? If so, and if your personal credit score is better than that of your business, you could consider using a personal credit card for business spending – with caution. Check your card’s terms to make sure it doesn’t prohibit business use; track your spending carefully to make sure you can separate personal and business transactions for bookkeeping purposes; and remember you’ll be personally liable for any debts you incur.
• Do you need to provide cards for your employees to use when making transactions on behalf of the business? If that’s the case, you could consider a prepaid card. These don’t require a credit check, and your employees can only spend the funds allocated to their card.
• Do you need to spread the cost of a large purchase for the business? You have plenty of other options for business finance in that case. Compare them carefully to find the best one for your business.
• Do you want to earn and spend rewards? You could use a personal reward credit card. However, you might be better off concentrating on improving your business credit score. This will help you get a reward card tailored to your business in the future. Concentrate on paying all your other bills on time and then maybe try again in 12 months.

Bottom line

Whilst no credit card lenders will offer you a business credit card without a credit check, there are ways to improve your chances of getting one, even with bad credit. If you have a bad business credit score, you may want to consider alternatives, such as bad credit business credit cards or using your personal credit card.

Improving both your personal and business credit scores could increase your chances of being approved for a business credit card. You can do this by ensuring all debt payments are made on time. However, missing payments can further hurt your credit score, decreasing the likelihood of getting a business credit card.

Frequently asked questions

• What's the difference between business credit cards and personal credit cards?

  Business credit cards are designed specifically for work spending. This is why lenders assess your business credit score first. They often include features such as additional cards for employees, customisable spending limits for different users and expense tracking. They are also more likely than personal credit cards to charge annual fees.

  The business will be liable for any debts incurred, not the user (unless you have signed a personal guarantee). Be aware that purchases made on a business credit card won’t be covered by section 75 as with a personal credit card.

• How do I apply for a business credit card?

  Most business credit card providers allow you to make applications online or over the phone. You’ll need to provide identification, proof of ownership and financial details for you and your business.

• What's the best business credit card for a new business?

  It depends on the nature of your business. Are you a small business or a large corporation? It also depends on what you want from your credit card. Are you hoping to earn rewards, or do you just need something to help you manage your cash flow? There are a number of business credit cards designed for startups. Compare them to find the one most suited to you and your business.