Can You Get a Corporate Credit Card With Bad Credit?

Understanding Corporate Credit Card Eligibility

Lenders review several factors for corporate credit card applications. These extend beyond credit scores to include a business’s financial health, operational aspects, time in operation, annual revenue, and financial statements.

Both personal and business credit scores can influence approval for small businesses or startups. Corporate credit cards are generally for larger companies with substantial revenue, while small business credit cards serve a wider range, including sole proprietors. Many business credit card issuers perform a hard credit check on the applicant’s personal credit, usually requiring a FICO score of 690 or higher.

Many business credit cards, especially for smaller businesses or those with limited credit history, require a personal guarantee. This makes the business owner personally responsible for the debt if the business defaults, potentially extending to personal assets. While corporate credit cards typically do not require a personal guarantee, they often have stricter eligibility criteria such as higher revenue thresholds and a minimum number of authorized cardholders.

Options for Businesses with Challenged Credit

Even with challenged credit, businesses have pathways to obtain a corporate credit card or similar financing. Secured corporate credit cards are a viable option for businesses with limited or poor credit history. They require a refundable security deposit, which typically sets the credit limit. This collateral reduces risk for the issuer, making them more accessible. Responsible use can help a business build positive credit history.

Some business credit cards allow qualification for businesses with less-than-perfect business credit scores by relying on the owner’s personal guarantee and creditworthiness. This means the issuer can pursue the individual’s assets and report negative activity to personal credit bureaus if the business fails to pay.

Alternative financing options, such as merchant cash advances, working capital loans, and startup loans, also cater to businesses with higher-risk profiles. Some alternative lenders focus more on a business’s revenue and cash flow than solely on credit scores. Invoice financing or asset-based lending, for example, can provide capital by leveraging unpaid invoices or commercial assets as collateral. These options can offer quicker funding, though they may come with higher interest rates compared to traditional loans.

Strategies for Building and Improving Business Credit

Building and improving business credit enhances a business’s financial standing. Separating personal and business finances is a foundational step. This involves establishing a distinct legal entity (e.g., LLC or corporation) and obtaining an Employer Identification Number (EIN) from the IRS. An EIN serves as the business’s tax identification number and helps create clear financial separation.

Opening a dedicated business bank account is crucial for maintaining this separation and tracking income and expenses. Obtaining a Data Universal Numbering System (DUNS) number from Dun & Bradstreet is important. This unique identifier helps establish a business credit profile, allowing lenders and partners to assess creditworthiness. Many lenders require a DUNS number when evaluating business credit and loans.

Utilizing tradelines that report to business credit bureaus is a direct way to build credit. These include credit accounts like loans, lines of credit, and payment terms from suppliers. Businesses can establish credit with vendors offering “net terms” (e.g., net-30 accounts), allowing payment within 30 days. Confirm these vendors report payment history to major business credit bureaus (e.g., Dun & Bradstreet, Experian Business, and Equifax Business). Consistent, timely payments are paramount, as payment history significantly impacts business credit scores.