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. Securing a good loan product is easy if your business has a good credit rating. 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 decide on get one, it really would do you good to determine the features of both secured and unsecured business credit cards.

 

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. 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 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, you may be looking at high interest rates. That’s because unsecured business credit cards do carry a high risk to lenders 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. While unsecured business credit cards can make building debt easy. It would also pay to review the payment terms of these business credit cards and select the one your company can realistically work with. 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.