Secured card for small business

Discuss the Visa & MasterCard payment networks as well as cards that operate through them.
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Parker19904
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Secured card for small business

Postby Parker19904 » Fri Apr 23, 2010 3:59 am

Hello everyone!

I arrived in the USA a few years ago and could start establishing my personal credit using a secured card from Orchard.

As I own a business incorporated here with an EIN, I would like to know names of banks offering small business secured credit cards, in order to start building my business credit.

To start, I am looking for a small credit limit (max. $1k), considering that pledging this amount as collateral would not be any problem. Many banks that I called are not offering this service.

I know this forum is more consumer oriented, but I could not find any answer even on Google.

Maybe members may have some experience to share and recommend a bank that can take applications over the net.

Thanks!


DoingHomework
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Postby DoingHomework » Mon Apr 26, 2010 1:53 pm

For business credit you are almost certainly going to need to give a personal guarantee rather than getting a secured card. If you have good personal credit then that should be all that you need.

Parker19904
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Postby Parker19904 » Mon Apr 26, 2010 2:35 pm

Thanks a lot DoingHomework.

I was also thinking about establishing vendor credit lines. I could obtain 3 of them recently. Maybe this will help build up a credit score.

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Mogul of Pineapples
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Postby Mogul of Pineapples » Sun May 02, 2010 10:32 pm

Yes right now especially you will need to give the personal guarantee on a business card. That means you will be liable for the debt, but if your business tax ID is also on the account, that means it should help build up your business's credit record.
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DoingHomework
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Postby DoingHomework » Mon May 03, 2010 12:02 pm

Yes - make sure your accounts are in the business name with your business tax ID even if you have to give a personal guarantee and be responsible for the debt.

Vendor accounts and trade references are useful as well for establishing credit but just remember they usually will not report to the credit bureaus so it is not as seemless as it is with consumer credit. When you apply for business credit you will need to give trade references. These can be subcontractors, utility companies, all sorts of stuff, even your friends if they sell to or contract to your business.

Parker19904
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Postby Parker19904 » Thu May 06, 2010 8:29 pm

Thanks for your replies.

I could find one, the CSI Business Mastercard. It is a secured one and I applied with a $1,000 credit limit. They use the company EIN only and report to D&B and Experian Business. This will be the solution to start.

The only thing with this card, that works like a charge card and not a credit card, is that they report in the TRANSPORT EQUIPMENT field of the Credit Report. This card is issued by a bank specialized in Fleet Cards, this explains why it is not reported as a credit card.

The utilization is reported on company credit reports, not the available credit. By using it a lot and paying in full (for than 30% i.e. of the available credit), this should help build a good credit. Later, I will consider an increase of my security deposit to increase my CL to $3,000.00.

Once again, I wish to thank you all for your answers above. I am more than glad that I could find this forum.



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