Credit cards for small business owners

Small business owners tend to have issues with getting credit cards.  However, small business owners are also some of the heaviest users of credit cards as they tend to value the flexibility that a credit card gives both for their lifestyle and their business needs.

It used to be hard for a small business owner to get a credit card.  This was because the business owner would have an unstable income and so credit card providers tended to prefer people who earned regular wages and so were also better credit risks.

However credit card providers have over time realised that this is a self defeating policy for a number of reasons.  Firstly small business owners tend to be among some of the highest earners in the country and so are also some of the highest spenders.  The other thing about a small business owner is that as they have a fluctuating income they will tend to be a heavier user of a credit card as they will need the ability to smooth out the fluctuations of income that inevitably come with owning a small business.  The other thing that tends to happen with small business owners is that they are likely to use their credit cards in order to finance at least some of their business expenditure, which means that the credit card is likely to be used even more heavily.  A related factor has been the desire of credit card processors to increase the range of businesses that accept credit cards, and so a need to increase the goodwill of business owners.

This has meant that there has been a growth of credit card lending to small businesses.  This has been in two main forms.  Firstly there has been a growth in the amount of standard credit cards that are available to small business owners.  The second has been the growth of credit cards that are specifically aimed towards small businesses, and that are often called small business cards.

The credit cards that are on offer to a small business owner have increased rapidly.  This has been accompanied by a growth of employees with an unstable income, whether contractors, commission based salesmen or employees who have a large part of their salary paid as an annual bonus.

Small business credit cards are also quite popular as they are a flexible form of credit that does not need to be secured on a house or an asset of the business, unlike many other forms of credit.