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The Best UK Business Credit Cards

If you’re low on funds for your business and have been turned down by your bank for additional loans, then you could benefit from a business credit card. Business credit cards are short term lending facilities which provide you with the money you need right now to cover expenses, repayable on a date set out in the lender agreement.

How do UK Business Credit Cards work?

In general, business credit cards work in a similar way to personal credit cards. Your lender givess you money today, and you agree to pay them back in the future.

The critical difference between a personal and business credit card is the entity using it. With a personal credit card, that entity is you, whereas, for a business credit card, it’s your company.

How much you can borrow with a business credit card depends on the creditworthiness of your firm. The more likely lenders think it is that you’ll pay them back, the more they will lend. Businesses with a good credit score are often eligible for high credit limits and low-interest rates. Those with poor credit histories, however, may struggle to access favourable rates or may be denied access to credit facilities altogether.

While it might tempt you to choose a business credit card based on the interest rate, there are all kinds of other factors which should inform your decision. Some providers offer interest-free periods where you pay nothing for the first 45 or 90 days, while others issue fees and penalties if you pay late. Similarly, a provider might charge a low annual fee, but you could end up missing out on special offers and cashback.

What do I need to apply and get approved for a Small Business Credit Card?

Business credit cards are a form of unsecured lending. The lender can’t repossess your business if you fail to make repayments. For this reason, lending requirements are relatively stringent. Typically, only companies with good credit histories can access business credit facilities, and even then there are tight limits on how much they can borrow. The lender has to have considerable confidence that you’ll pay them back.

Taking out a business credit card is similar to taking out a personal credit card. Most company executives head to their nearest bank branch for a face-to-face meeting with a bank manager, although you can now apply for some credit cards online.

The bank manager will already have a lot of the documentation that they need to assess whether you qualify for a business credit card. But you may want to take additional items with you, including your personal and business bank statements.

Whether your lender will give you a business credit card depends primarily on your credit score. The better your score, the more likely they are to trust you with their money. Applying for a business credit card is not an all-or-nothing event. You may not get the £5,000 credit limit that you want, but your bank manager may be willing to compromise and offer you a £3,000 limit at a favourable rate.

Unfortunately, it’s not possible to apply for a business credit card without a credit check. Ever provider on the UK market uses credit rating agency to verify your credit history and determine your level of risk.

Even if you or your business has a terrible credit score, it’s often still worth applying for a business credit card. Lenders may give you a credit card with a low limit which you can then use to build your credit score. Over time, you may gain access to products with fewer restrictions.

How does a Business Credit Card help my business with Cash Flow?

Poor cash flow is one of the leading reasons why companies get into financial trouble. Even profitable firms can experience severe disruptions to their operations and possible failure if they don’t manage their cash flow correctly.

Cash flow issues usually arise when there’s a time lag between paying out money for the things you need and getting paid by your clients. A construction company, for instance, has to buy all the labour and material it needs to build a house before it gets paid by the new owners. The construction company might be profitable, but if it doesn’t have credit to pay all its stakeholders upfront, it can’t complete the build.

Small business credit cards, therefore, are best seen as financial facilities that help smooth cash flow. An SME credit card allows you to continue paying for all the things that you need, like heating, lighting, and labour, while avoiding irritating employees and suppliers.

The Top 7 Business Credit Cards For Small Businesses

In the following, we compare business credit cards from a range of lenders across the UK.

American Express Platinum Business Card

American Express has a reputation for offering business credit cards with rewards, and its Platinum Business Card certainly lives up to the card provider’s reputation. Not only do owners of the card get access to Amex’s Membership Rewards programme, but a host of other benefits to boot.

The Things We Like

● All users get a membership point for each pound that they spend using the card. There’s no limit to the number of points you can acquire throughout the year, so long as you abide by the terms of use.

● You get an additional membership point for every pound you spend on selected travel-related services, such as car hire, flights and hotels.

● All users get access to more than 1,000 exclusive airport lounges all over the world to make travel more enjoyable.

● All users get access to worldwide travel insurance

● Platinum business card users have access to Amex’s refund protection service which applies to purchases made in the last 90 days.

● Business users get a grace period of up to 54 days until they owe payment on purchases, offering more flexibility.

The Things We Don’t Like As Much

● The annual fee is £595 is a little steep for some

● You get one complimentary Platinum Card for another member of your team. All other people must use Gold cards, losing many of the perks and benefits described above.

● The American Express Platinum Card is marketed at business executives who must regularly travel overseas. However, there’s 2.99 per cent surcharge on all non-sterling transactions which seems a little strange.

Capital On Tap Business Credit Card

The purpose of the Capital On tap Business Credit Card is to help small businesses and sole traders get access to the credit they need when they need it. It’s a credit card for the self-employed as much as it is for larger businesses with two or more people.

The Things We Like

● Capital On Tap does not charge an annual fee.

● Capital On Tap does not charge for non-Sterling transactions, allowing you to use it outside of the UK for no extra cost.

● The standard APR for a Capital On Tap card is relatively high. You can build up a good reputation with the lender, however, and reduce your interest payments as low as 0.79 per cent.

● Capital On Tap offers up to ten supplementary cards that other members of your team can use. Be warned, though, that your total credit limit will not change. If you agree a £10,000 limit with Capital On Tap and one of the ten people in your office spends £3,000, then all your team will have £7,000 left over.

What We Don’t Like As Much

● Capital On Tap doesn’t charge an annual membership fee, but neither does it offer rewards with the standard version. If you want cash back or reward points, you’ll have to opt for one of the lender’s paid services.

● Capital On Tap offers the first 56 days interest-free, but after that, you’ll always pay any interest on the money you borrow.

HSBC Commercial Credit Card

HSBC is a solid choice for businesses looking for a credit card with a low fee. The annual cost is £32, and you won’t pay anything for the first year.

The Things We Like

HSBS takes fraud protection extremely seriously. The company’s proprietary Fraud Detection System will immediately alert you if it believes that one of your cards is being misused. HSBC also offers Zero Fraud Liability protection, a service that fully protects you against the effects of fraud, should they arise.

HSBC provides customers with flexible payment tools through its account management system. With an HSBC Commercial Card, you can adjust your repayments to suit the needs of your business.

● The card does have an annual fee, but it’s low at just £32 – and that’s only from the second year onwards. In return, you get access to HSBC’s suite of fraud protection services and other benefits, like account management.

What We Don’t Like As Much

● While the annual fee for the HSBC Commercial Card might be low, it doesn’t offer any rewards. Usually, you’d expert points or other financial benefits for choosing a paid credit card service.

● The card does not offer any cashback programme for regular users

● You can use the card overseas, but you’ll need to pay a 2.99 per cent non-Sterling transaction fee for each purchase you make.

American Express Basic Business Charge Card

The American Express Basic Business Charge Card targets the entry-level business operator market. It’s for small company executives and sole traders who need a credit facility to manage their cash flow. You must pay off a charge card in full at the end of every month.

The Things We Like

● Because it’s a charge card, there’s no annual fee. You pay off your balance in full each month, and that’s it.

● With charge cards, there’s no limit to how much you can spend during the credit period. Just remember though, you need to be sure you have the money to pay off your balance in full at the end of the month.

● The Amex Basic Business Charge Card allows you to put up to 99 employees on the same account. Remember, though, that any spending is cumulative.

● You get access to Amex’s essential account management tools and online app, 24-hours per day. You also get additional benefits such as card replacement, if your card gets stolen in the UK or abroad.

What We Don’t Like As Much

● The purpose of the American Express Basic Business Charge Card is to keep things simple. And while that’s a good thing, some business owners will be disappointed by the lack of rewards.

● If you want to use this card overseas, you’ll need to pay for it. The American Express Basic Business Charge Card is subject to Amex’s regular 2.99 per cent non-Sterling transaction fee.

Metro Bank Business Credit Card

Metro Bank’s Business Credit Card is marketed for its simplicity and transparency. It’s for businesses that want a no-fuss finance option. It is also a business credit card with balance transfer, allowing to consolidate your credit situation.

The Things We Like

● Metro Bank Business Credit Card offers a low-interest rate, which reduces the overall cost of borrowing.

● There’s no annual fee

● The Metro Bank card offers balance transfer up to 75 per cent of the card’s limit.

What We Don’t Like As Much

● Beyond the 56 days introductory period, there are no other interest-free periods. If you borrow, you must always pay the standard APR.

● There are no rewards – this is a pure credit facility to help businesses manage cash flow.

Santander Business Cashback Credit Card

Cashback is one of the most popular business credit card offers. If this is the kind of perk that you like, then you’ll love the Santander Business Cashback Credit Card. It offers 1% cashback on all purchases and doesn’t have any nasty foreign transaction fees, making it great for use abroad.

The Things We Like

● The 1% cashback offer is excellent. If you spend £2,000 on the card, you’ll get £20 back as a reward. This way, you can make your business spending work for you

● There are no overseas charges, meaning that if you pay by card, you won’t pay any other international banking fees.

What We Don’t Like As Much

● There’s a fee of 3 per cent if you take out cash using the card from a foreign ATM.

● You’ll pay an annual fee of £30, and you’ll have to pay the first year upfront – not something that all competitors demand.

Royal Bank Of Scotland Business Plus Credit Card

The Royal Bank Of Scotland Business Plus Credit Card considers itself to be a premium product, offering a host of benefits including free non-Sterling transactions and cashback.

The Things We Like

● The Royal Bank Of Scotland Business Plus Credit Card offers impressive cashback: 2% on purchases from eligible suppliers, 1% on hotel accommodation and fuel, and 0.5% on everything else.

● There are no fees for using your card abroad.

● You can transfer up to 95 percent of your available credit limit. All balance transfer get charged at the same interest rate as purchases.

What We Don’t Like As Much

● If you want to use this RBS business card, you’ll need to fork out £70 per year.

● You can add additional cards, but you’ll have to pay an additional £70 per year for each.

Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

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