Updated on: Feb 24th, 2024
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6 min read
The purpose of business loans need not always be to purchase raw materials, to pay rent/salaries, to expand the business, and to manage other debts. There can be expenses beyond these items listed, such as travelling to meet a potential client, purchase gadgets to improve the market reach of the business, and others. You cannot approach a lender for finances to cover these expenses. Business credit cards can come handy at times like this and give you a window to repay the debt.
A business credit card is specifically designed for business expenses and is not meant for personal use. A business owner can obtain and distribute business credit cards to the employees and let them pay for business expenses so the bills will be paid by the business owner once a month. Such credit cards help keep track of business expenses and also get some benefits on these expenses.
Many banks and financial institutions offer business credit cards that come with multiple advantages. Here, benefits of business expenses mean cashback on business spends, bonus points on spending a certain target amount, and others. The credit card makes it easy for you and your employees to pay when travelling within the country or abroad for business purposes.
You may have to incur one or more of the following based on the card and the lender you choose. Accordingly, the features and benefits of the card vary.
*The eligibility criteria may vary depending on the lender
You must satisfy all the eligibility criteria set by the lender and have a good credit score. Also, you must have been running a business even if it involves a single person. Approving a business credit card is up to the lender’s discretion. Not everyone who applies will get one.
A lender can check both your credit rating as well as the business credit rating.
Once you receive approval, it may take 7-10 working days to receive the credit card. The entire process may take 15-20 working days after submitting the application form. However, the timeline may vary depending on the lender.
The lender will take a call on the card limit based on the number of cards you wish to obtain, the current status of the business, the expected future cash flow, the credit rating of your business, and many other factors.
Business loans are not limited to traditional expenses but can also be used for unconventional items. Business credit cards are designed for business expenses and tailored for businesses. They offer benefits like interest-free repayment, rewards, cash advance, and lifestyle perks. Fees include joining fee, annual fee, finance charges, etc. Eligibility requires Indian citizenship, running a business, and specific documents. Approval is at the lender's discretion. It can help build credit history and provide additional purchasing power for business growth.