While fairly common across the pond, lenders don\u2019t usually offer secured credit cards to businesses in the UK.<\/p>
So, what are your options if your business\u2019s credit score is less than ideal?<\/p>
Secured business credit cards work just like regular credit cards, but require you to put down an initial cash deposit, which will then become your credit limit. <\/p>
As this takes away pretty much all the risk for lenders, you\u2019re often able to get one even if your business is very new or your credit score isn\u2019t great.<\/p>
At the same time, using a secured credit card helps you grow your business credit score<\/a> and lets you earn rewards on your spending.<\/p> But let\u2019s not dwell too much on what we can\u2019t get. Even though a secured credit card is not an option, there are other types of business finance that could be available to you. <\/p> This will sound very obvious, but are you sure you can\u2019t get a standard unsecured business credit card<\/a>? Some lenders may have looser criteria than others and may be willing to accept your application.<\/p> Just make sure you check your eligibility before proceeding with a complete application, so that there\u2019s no impact on your credit score. Initially, you might have to settle for a low credit limit and a high interest rate, but if you pay off your bill in full every month, your business credit score will gradually improve and you will become eligible for a more competitive deal.<\/p> Our tips to get a business credit card with bad credit<\/strong><\/a> <\/p> A business line of credit<\/a> is the flexible version of a business loan. You can borrow what you need and when you need it up to your credit limit, and you\u2019ll only pay interest on what you actually borrow.<\/p> Some lenders offer secured lines of credit, which may be a good solution if you don\u2019t qualify for the unsecured version of it. Unfortunately, unlike with a credit card, you won\u2019t usually benefit from any interest-free days.<\/p> What\u2019s a business line of credit and how does it work?<\/strong><\/a> <\/p> Merchant cash advance<\/a> could be a good idea for borrowing one-off. It\u2019s quite similar to a business loan, so you get a lump sum from the lender at the very beginning, but instead of paying it back in fixed monthly instalments, you pay it back as a percentage of your card sales. This way, how much you have to pay back depends on how much you actually earn.<\/p> You\u2019re charged a flat fee and no interest, so it doesn\u2019t really matter how long it takes you to pay back the loan. As repayments are taken directly from your card terminal (before they even reach your account), your business credit score is less of an issue. Borrowing this way will definitely be more expensive than using a credit card, so you have to weigh the pros and cons carefully.<\/p> Compare merchant cash advance providers<\/strong><\/a> <\/p>Alternatives to secured business credit cards<\/h3>
Unsecured business credit cards<\/h4>
Business line of credit<\/h4>
Merchant cash advance<\/h4>
Invoice financing<\/h4>