Can I get a business credit card with bad credit?

Although it can be trickier to get a business card with bad credit, it’s not impossible. There are a number of companies who specialise in offering business credit cards for business owners with bad credit, so it’s important to shop around first.

6 min read
Woman in a cafe, holding a credit card and looking at her laptop

How do business credit cards for bad credit work? 

Business credit cards work in the same way as personal credit cards, with a few key differences:

  • you must own a business or be a stakeholder in a business to get one
  • business credit cards are designed for business use only
  • business credit cards have specific features, like additional cards for employees, expense tracking and customisable spending limits

What is a bad credit score? 

Your credit score gives lenders an indication of how creditworthy you are, based on how well you’ve managed your finances in the past. A low credit score indicates that either you haven’t taken out credit before, or you may have certain negative markers on your credit history, including things like:

  • missed or late payments
  • defaults
  • County Court Judgements (CCJs), bankruptcy or Individual Voluntary Arrangements (IVA)
  • multiple applications for credit made in a short space of time
  • poor credit utilisation

Is my business credit score the same as my credit score?

No, but it works in the same way – meaning it can change based on which credit reference agency you check, because they all operate slightly differently. It’s best to check with the three main credit reference agencies in the UK:

  • Experian
  • Equifax
  • TransUnion

In some cases, some lenders may look at your personal credit score as well as your business one to get a better picture of your financial history. It’s also worth noting that if you fail to pay off your business credit card on time, it could negatively impact your personal credit score.

What credit score is needed? 

There is no set credit score that you need to aim for to get accepted for a business credit card. Each lender uses different criteria (and they don’t just look at your credit score). So, you may be accepted by one and declined with another. Having said that, the higher your credit score is, the more chance you have of being approved. This is because you’ll seem less of a risk to lend to.

Remember, your credit score isn’t the only factor lenders will consider, so a less-than-ideal score may not mean you’ll be rejected for a business credit card.

If you have bad credit, your options may be limited, and you might struggle to access the best offers. So, you may want to try and build up your business credit score before applying – or research lenders who specialise in credit cards for poor credit.

Read on for our top seven tips for boosting your credit score.

Why should I get business credit card for bad credit?

There are several reasons why you may consider getting a business credit card, such as:

  • you can easily track the cost of business purchases and expenses, which is useful for tax purposes
  • if you manage the card well, your business’s credit rating should improve, which may help you to access better finance deals in the future
  • some cards come with rewards (though these may be harder to get with bad credit)
  • you can add employees as additional cardholders

What else do I need to consider? 

Before applying, consider the following points:

  • you should make sure you can afford the monthly repayments on anything your business buys using the credit card
  • missed or late payments can impact your business credit score (and personal credit score if you’ve signed a personal guarantee or are an authorised user) - and incur late fees and charges
  • it’s possible that employees who have access to your card may make unauthorised purchases with it

How to get a business credit card with bad credit 

Follow these five steps to maximise your chances of being accepted for a business credit card.

1. Do your research

You’ll find it difficult to find the best range of credit cards while you have bad credit. So, you’ll need to research your options thoroughly to find the right deal for you.

2. Check your eligibility

Use a business credit card eligibility checker to see whether it’s probable that you’ll be accepted – before you apply. It doesn’t affect your credit score or appear on your credit report for lenders to see.

3. You might be asked to sign a personal guarantee

You may be asked for a personal guarantee on your business credit card, especially if your business is small or new. If this is the case, the lender will take your personal credit history into account when making their decision, so you may want to work on building up your credit score first.

4. Get your credit report in shape

You can do this by making sure you can afford to pay your business outgoings on time every month. There are some quick fixes you can do, like making sure your regular payments are paid on time. It may also be an idea to reduce any current debt as much as possible before applying to take out more.

5. Don’t apply for lots of cards at once

Your credit score dips every time you apply for credit, so don’t apply for lots of business credit cards at once.

Alternatives to a business credit card

If a business credit card isn’t right for you, you could consider these alternative options:

  • prepaid card – a prepaid business card can be loaded with money and used to make purchases or draw cash from an ATM
  • business charge card – you don’t have a spending limit, but you must pay off the balance in full each month
  • business loan – you get a lump sum of cash and then pay it back in monthly instalments over a set time period (including interest)

Please remember, these options may have their own eligibility criteria.

Disclaimer: All information and links are correct at the time of publishing.