What's the Deal with Secured and Unsecured Business Credit Cards?

There may come a time when your business will need credit to make it grow. You don't have to worry about getting credit if your company has good credit. However, what if your credit score is hindering your business from getting funding? One of the products lenders can probably offer you is unsecured business cards for bad credit. But before you get one, it do you a heck of a lot of good to review what both secured and unsecured business credit cards entail.

 

As the name suggests, a secured business credit card is obtained after you put up a collateral, most specifically a separate bank account that is both active and stable. This is because some lenders may opt to offset some of the risks associated with lending to a company with bad credit score by getting a guarantee for future payments. Additionally, the amount granted to your company would not be as high as you would prefer. In fact they offer less than the amount that was you applied for. Remember you'll probably won't be able to make large purchases with this business credit card could be the impact. You'll have to be more creative and work harder for growth and expansion of your business. One possible benefit a secured business credit card has is a manageable interest rate.

 

Considering the pros and cons of secured business credit card, a lot of companies still opt to apply for unsecured business credit cards for bad credit. This type of loan can be obtained without putting your house or assets up as collateral to back the loan. However, its features include relatively high interest rates. Lenders and banks consider unsecured business credit cards a high risk compared to secured ones.

 

Those who have obtained unsecured business credit cards for bad credit also need to keep a close eye on their transactions, since this type of credit card also has more stringent payment terms. However, your business may get approved for this type of loan so you have funds for operating expenses.

 

Hence, it would really be beneficial to your small business if you determine first which type of financing your company needs. You'll have less of a risk of getting into a high amount of debt with a secured business credit card for your small business. While unsecured business credit cards can make building debt easy. Realistically, it's tough to be choosy with a lender, however, you want to make sure you review the terms of the card to see if you can handle it. Know that obtaining business credit cards despite your bad credit is an opportunity in itself to turn your business around and clear your unfavorable credit score as well. With proper procedures in place, as well as following payment terms, your goals can be readily achieved.   

 

For more information on unsecured business credit cards for bad credit, visit http://www.buildingmybusinesscredit.com, a web site that provides business credit building information to small and home businesses.