Business Credit Card Guide
Nobody goes into business for the financial admin (unless, of course, you’re in the business of bookkeeping). But for everyone else, no matter whether you’re trading in software or loungewear, business purchases are a necessary part of business. And if you have staff, managing their spending can be unnecessarily taxing when you have a far bigger picture to paint.
That’s where business credit cards extend a credit lifeline. By providing a line of credit to pay for your business purchases, business credit cards free up cash flow and may offer other benefits like additional cardholders and expense reporting systems.
It all helps companies to spend smart, and manage smarter, to make life easier.
What is a business credit card?
The plastic might look the same. But when you look into credit cards, they’re separated into personal and business cards for good reason. While they function the same way, business credit cards offer features to help companies manage cash flow, spread out costs, track expenses and control employee spending.
So, if you have a business you should have a business credit card. And you can use it to pay for any business-related purchases from office equipment and software subscriptions to taxis and yes, even lunch.
How do I get a credit card for business?
You know the potential of your business, but the banks may not always agree. If you’ve ever tried explaining your crypto café or ‘Zoom fashion’ e-commerce platform when applying for a line of credit, you’ll know the look of scepticism that can derail the approval process.
The fact is, banks don’t make it easy for smaller or newer businesses to access credit – instead holding off until their cash flow is healthier, they’ve been a long-time customer or until there is full planetary alignment (which according to scientists will next happen in May 2492).
Still, you can apply for a business credit card in a couple of ways. If you’re a traditionalist who likes the solidity of bricks and mortar, you can take time out of your work schedule, (try and) find parking close to a bank branch, fill out (actual) paperwork with multiple signatures and then wait for the ‘yes’ stamp. Which for some never comes. In the meanwhile, your cash flow is up the creek (along with all those missing receipts) and your customers are waiting for you to get back to business.
If your company is big enough to have a high turnover, you may be able to apply online or request a call back (at some point) from a human who will put you through a similarly lengthy process. But even if you do get the green light, your shiny new bank corporate card in Australia simply won’t be tailored to the individual needs of your business. So that was worth the trouble, wasn’t it?
That’s why Archa created a better way. Archa is a smart business credit card and spend management solution helping businesses access the credit they need, when they need it. You won’t need your car, a pen or planets in any specific configuration. Instead, you’ll be assessed, approved and onboarded in a matter of days. No paperwork, no personal guarantee. And you can use your Archa card anywhere Mastercard® is accepted, which is pretty much everywhere.
Benefits of using a business credit card
Business credit cards offer features to help separate personal and business expenses, simplify record keeping and keep your spending in check. They also offer a higher credit limit than personal credit cards (making it easier to make large company-related purchases), while some may have rewards programs attached.
Unlike personal credit cards, business credit cards can also be issued to staff, enabling them to make business purchases when they need to. Cards can be set up with specific credit limits for individual employees. For instance, Tom and Sarah get a spending limit of $5,000 each, and you get a $10,000 limit (well, it’s your company) for a combined limit of $20,000.
But traditional cards also come with traditional downsides, like restrictive credit limits that don’t flex with your cash flow, interest-free introductory offers (that disappear soon after you’ve been introduced) and a list of hidden fees and penalties for payments you inadvertently delayed while you were busy running your business.
Archa delivers credit that’s better than the banks. That’s why we exist.
Archa business credit cards simplify expense management to make life easier for businesses. With effortless onboarding. Zero personal liability. Instant card issuing for multiple employees.
Archa offers 30-day payment terms (interest-free days) with a transparent monthly subscription fee as opposed to (surprise) traditional credit card interest fees. Giving business owners greater insight into and control of their spending. We think it’s the credit your company deserves.
Digitising your expenses also offers businesses unmatched flexibility. Not only does Archa integrate seamlessly with your Xero accounting software so you can simplify your book balancing. But you remain fully in control with the ability to freeze and unfreeze cards, plus set individual spending limits so you can stay in control. What’s more, we never ‘close’ at 4pm. You can email or speak to our locally-based support team 24/7.
Whether you’ve always been a digital business or COVID forced you online, Archa provides easy business credit cards to empower today’s remote workers to make the decisions they need to help grow your business.
What do you need to apply for a credit card for business?
Whether you’re a large operator needing a ‘corporate’ credit card or a smaller company wanting a business credit card (at Archa, we like to think we’re taking the ‘corporate’ out of credit), have your paperwork and patience handy.
Small to medium-sized business? Before a bank can decide your business is creditworthy enough for a business credit card, you’ll need to hand over your company and personal financial details. If you’re a young company, your annual revenue may not be worthy of a bank’s time or gamble.
Assuming your annual revenue and personal credit history look good on paper, there’ll be yet more paper involved with a ream of application forms (and outdated filing systems) that explain the time it takes to reach a decision. All the while, you’re weighing up if new software or office coffee is a more crucial business purchase with the funds you have.
Big business with even bigger dreams? For a credit card for business, you’ll have to meet additional eligibility requirements like having a minimum number of years in trading or minimum annual turnover. You’ll also need to make an appointment to speak with your provider’s business team.
As a business fintech credit card company, we make the process simple and require minimal information, including:
6 - 12 months of business bank statements ID (Driver's Licence or Passport) of business owner Proof you're over 18 and an Australian permanent resident ABN registration details Additional criteria if you're operated by a trust or a partnership
We don’t think anyone should have to choose between Google Suite and espresso. With Archa small business credit cards, there’s no paperwork, queues or workday interruption to getting the spending power you need to get on with business. In five minutes online, you could be approved and on your way to maintaining your technology and your caffeine intake.
Things to consider before getting a business credit card
It goes without saying (but we will) that if you’re considering a traditional business credit card in Australia, you should be aware of the benefits, charges, liability, interest rates (on purchases, balance transfers, cash advances) and fees (annual, account keeping, late payment, cash advance, foreign transaction fees, non-bank ATM). And those hidden fees? Well, you won’t know those upfront of course. But they’ll be sure to come out of hiding when you least expect it.
Now don’t forget the potential membership rewards. If you’re looking forward to redeeming earned ‘points’ for cash back, travel programs or gift cards, make a point of knowing cards with high rewards typically come with higher annual fees and interest rates too.
Whatever you choose, it’s important to consider the needs of your business. If you need to quickly amass technical equipment for staff or fixtures for the office, a card with a lower rate on purchases for the first six months will help keep the cash flowing. If you need multiple cards for remote staff, get one that links all cards to a single account, plus fast issuing so you don’t waste time on postal delays or wasteful spending.
Who is responsible for a company credit card?
Personal vs business credit card liability
Someone (not the bank) has to pay the debt on the card, and that could be you or your business. The provider may offer either a personal liability or business liability for the account, which determines who’s responsible for managing (ie paying) the card.
Established businesses operated by a partnership, trust or incorporated company can apply for that business to have liability for the credit card facility. But smaller business credit cards typically require the applicant to pay the bill personally if the company can’t – including if the business fails. Because banks are hesitant to offer credit to companies without a solid track record, entrepreneurs and sole traders have long had to lean on their personal credit (if not on others) to get their start-up capital.
It’s why the system is broken, and why Archa set out to fix it – by turning the business credit card into an asset for smaller business owners, not a liability. Archa doesn’t require a personal guarantee from the business owners, and applying doesn’t affect your personal credit score. Our underwriting process determines your creditworthiness using only your company’s financial data, and we provide credit based on those results. That means you can get your business off the ground and flying right away.