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. If your business has a good credit score then getting credit is sure thing. What if have bad credit and really need money to keep your business going? 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. They may start you off slow and offer less than the amount you applied for. As a result, your freedom to make huge purchases with this business credit card would surely be affected. You'll have to be more creative and work harder for growth and expansion of your business. One benefit of secured business credit card, however, is the 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 up any form of collateral. 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, businesses may readily be granted with this financing tool, providing ready funds for expenditures.

 

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. On the other hand unwanted debt is a possibility when you obtain unsecured business credit cards for bad credit. 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. Take note that getting a business credit card, despite your bad credit is an opportunity to turn your business credit rating around. With proper strategies and policies, as well as adherence to payment terms, these 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.