The Top 3 Unsecured Credit Card Funding Sources for Small Businesses

Posted on July 12, 2018

Credit card funding is an increasingly popular option for small businesses and independent franchises. It’s especially helpful for entrepreneurs who don’t automatically qualify for conventional business loans or who don’t have immediate access to lending networks. Regardless of what your company provides for the market, unsecured small business credit cards are likely to help with funding. Paying for expansions and keeping vendor accounts current can be difficult but finding the best unsecured credit cards doesn’t have to be.


If you use your credit cards wisely and avoid making unnecessary or in-affordable purchases, it’s possible to enjoy the benefits of unsecured funding sources. Credit cards for small businesses usually feature higher spending limits, lower interest rates, and more generous rewards programs than consumer cards. Furthermore, the best unsecured options offer balance transfer promotions, customized concierge services, and numerous fringe benefits as well. However, some unsecured funding sources require annual fees or excellent credit scores to be approved.


Qualifying for small business credit cards is a little different from qualifying for consumer cards. Many creditors require only the submission of a valid Social Security number or ask the cardholder to affirm in writing that the account will only be used for business-related purposes. The less strict issuers welcome anyone who files a Schedule C on their taxes, including folks who don’t necessarily consider themselves small business owners.


Unfortunately, many card issuers are stricter and request an EIN (employer identification number), proof of incorporation, or earnings statements. So, if you can’ prove that you’re the owner of a legitimately incorporated business with incoming cash flow, you probably won’t qualify. Submitting applications to those creditors can result in an increase in the number of hard inquiries on your credit profile, thus lowering your scores and making it more difficult to get the unsecured credit card funding you need.


Remember also that small business credit cards are often exempt from many of the valuable protections mentioned in the CARD Act, including the mandate that requires the card issuer to inform cardholders of any changes to the terms and conditions. The following unsecured credit card funding sources offer a nice mix of those pros and cons and are ideal for small business owners with decent credit:


Capital One Spark Cash/Miles for Business


This funding option for small business owners is perhaps the most convenient, with a $500 Early Spend Bonus and 2% Cash Back on every purchase with no caps or restrictions. Similar to the Spark Miles for Business card by the same issuer that offers a miles-based rewards program, the Spark Cash features a cash-based rewards system. Furthermore, when you sign up for either card option and spend $4,500 or more within the first 3 months, you get a $500 bonus in the form of cash or travel purchases. Small business owners who use these cards can redeem their accumulated rewards in any amount for checks or statement credits.


There is, however, a $95 fee charged annually but it’s waived in the first year. There are no balance transfer or foreign transaction fees though, and cash advances only cost 3% or $10, whichever is greater. The introductory APR is set at 0% and cardholders can get itemized quarterly reports with their statements as well as prompt payment reports submitted by the issuer to the three main bureaus.


Capital One Spark Classic for Business


The Spark Classic small business funding option from Capital One is similar to the Spark Cash/Miles card with a few glaring differences. Firstly, the Classic doesn’t offer an equally generous rewards program or an Early Spend Bonus. It also has a higher APR, but this is one of the best cards for poor credit. According to the issuer, this funding source is designed for small business owners with a less than perfect rating and thus features credit-tracking and -building tools to help keep the cardholder up to date on their progress.


It does, however, offer unlimited 1% cash-back on all purchases. Furthermore, cardholders can redeem their rewards for a check or general statement credits as well. As a terrific unsecured funding option for rebuilding credit with no deposit, this card features 0 annual fees, foreign transaction costs, or balance transfer charges. Cash advances cost the same: $10 or 3%, whichever is greater. There is no introductory APR offered though, but you can get customized spending reports and have your payment history promptly reported to the credit bureaus for fast business credit building.


Capital One Venture


Perhaps the best unsecured credit card for small businesses that travel a lot, the Capital One Venture card offers the highest rewards earnings potential on flights and hotels – a whopping $2.40 per every $100 spent. In addition, cardholders receive a 50,000-mile bonus when they spend at least $3000 on purchases within the first 3 months of activation, which is the equivalent of $500 cash on travel purchases. Furthermore, when you book hotels through their affiliate website you get unlimited 10x miles for every dollar spent.


There are very few restrictions when it comes to redeeming your rewards as well, but small businesses need pretty good credit to get approved for this card. The annual fee of $95 is waived for the first year though, and the variable APR ranges from 14.49% to 24.49% depending on your scores. Cardholders do get charged for balance transfers at a variable rate, however, but there are no foreign transactions fees and your accumulated miles never expire.


The Final Verdict


What it means to be a small business is changing, with more unsecured funding sources than ever before. Being an entrepreneur is no longer defined by your financial options. Small business owners may still need thousands of dollars in startup capital for supplies, dedicated office space, or employees, but that money is much easier to come by when unsecured business credit cards are used.


For fast unsecured loans and better financing opportunities for your small business venture, start with the sources listed above. With convenient cardholder incentives and potentially lucrative rewards programs, being in business by yourself isn’t as difficult or costly as it once was. For more information or help applying for the best unsecured credit cards, work with a team of knowledgeable professionals while the iron is hot.

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