Small business credit cards help you manage the transactions and expenses you need to run a successful business. The best small business cards offer higher credit limits than personal cards, valuable rewards, employee card options, and other useful perks. However, you’ll need to report your annual business revenue when applying for a credit card, which can raise questions, especially if you’re just starting out.
Learn why you’re asked about revenue on your business credit card application, what counts as business revenue, what not to report, what to do if you don’t have any revenue yet, and other information you’ll need to complete your application.
Why are you asked about your income when applying for a business credit card?
When you apply for a small business credit card, issuers will ask you about your income because they need to prove that you have the financial means to repay the debt.
Providing your income allows issuers to determine whether you are likely to spend responsibly and make payments on time, and if approved, it gives financial institutions guidance in setting spending and credit limits for your business credit card account.
— Renee Jones, Vice President of Consumer Products, Georgia’s Own Credit Union
While issuers keep their exact approval criteria for credit cards confidential, the evaluation typically considers factors such as your business revenue, business credit score, and how long your business has been in business to provide a comprehensive assessment of your creditworthiness.
For example, American Express typically asks for your “total annual business revenue” and “estimated monthly expenses” when applying for a business credit card, while Bank of America typically asks for your “total annual sales.”
This rating helps the issuer decide whether to approve your requested card, and it also helps determine how likely you are to make payments on time and use the card responsibly.
While you aren’t required to report your earnings when applying for a business credit card, there are benefits to doing so, including the possibility of receiving a higher credit limit or better credit terms.
— Phillip Parker, Founder, CardPaymentOptions.com
What to report as revenue on your business card application
When you apply for a credit card, you’re asking for revenue, which is the total income a company generates in a year. Revenue is the total amount of money a company earns. It’s different from profit, which is revenue minus operating costs, taxes, and various expenses.
When you report your annual business income on a credit card application, accuracy is important. You should add up your income from all sources related to your business. This often includes income from:
- Product Sales
- Service Sales
- Acquisition or Appraisal of Assets
- Real estate or equipment leasing
To ensure accuracy, you’ll need to thoroughly review your business’s financial records and cover all revenue sources for the past 12 months.
Experts recommend reporting only income that you can back up with documentation.
Lenders may ask for proof of income, so it’s important to have pay stubs, contracts, receipts, invoices and other documents to back up your figures.
— Renee Jones, Vice President of Consumer Products, Georgia’s Own Credit Union
You may be able to report both your business and personal income to issuers, which will boost your credit rating and further prove that you have the means to make your monthly payments on time if your business credit card application is approved. However, you should report your personal income in the personal information section of your card application, not the business information section.
If you’re a freelancer, independent contractor, or sole proprietor, you can report your pre-tax income from the previous year as business income.
What should not be reported as revenue?
Do not include income for which you do not have verifiable documentation, as issuers may request proof of income. This includes:
- Pay slip
- receipt
- contract
- invoice
Also, exclude any income that is not related to your business. If you have a side job or a side hustle that is not related to the business you’re applying for the card for, don’t count this as business income on your card application. You can accept it as personal income, but don’t include it in the business details section.
What if your business doesn’t have any revenue yet?
If your company is brand new or recently incorporated, it may be difficult to report your annual business income, especially if you have no annual business income. In this scenario, report $0. This will not automatically result in your application being rejected. Instead, credit card issuers may look at your personal income to determine whether to approve you.
Alternatively, if your publisher allows it (check beforehand), you can report revenue projections based on your business plan, contracts, and projected revenue. Just be sure to have supporting documentation ready in case your publisher requests verification.
Transparency is important for businesses that don’t yet have revenue. Applicants must disclose the company’s current financial situation and any funds or capital they have. Some credit card companies may consider projected revenue and the personal credit history of the business owner in these situations.
— Phillip Parker, Founder, CardPaymentOptions.com
Other information required for business card application
When applying for a business credit card, in addition to your business and personal income, be prepared to provide the following details, if requested:
- Company Name
- Business Address
- Business Taxpayer Identification Number (TIN) or Employer Identification Number (EIN)
- Type of business
- Number of Employees
- Years in business
- Estimated Monthly Business Expenses
- Personal information (such as your name, social security number, date of birth, email address, phone number, or home address)
- Career
- Monthly mortgage or rent payment
- Banking information (such as checking and savings account balances)
- Personal Credit Score
What if you don’t have a business credit score yet?
Not having a business credit score typically won’t affect your chances of getting approved for a small business credit card.
“In this case, the issuer may rely on your personal credit score,” Parker says, “but this may affect the terms of your credit card, such as the interest rate charged and the credit limit.”
Ted Rothman, senior industry analyst at Bankrate, points out that most small business credit cards require a personal guarantee.
“This means that if your business fails, the bank can seek payment from you personally,” he says, “which is why your personal income and personal credit score are often important parts of your application.”
If you want to avoid this personal guarantee requirement, consider applying for a true corporate card that is guaranteed by your company, which doesn’t require a personal guarantee.
Who can get a small business card?
The good news is that small business credit cards are available to a wide range of applicants, including traditional store owners and operators, sole proprietors, landlords and online resellers.
The key is to have legitimate business operations. Businesses that do not have legitimate business operations or engage in questionable business practices may not qualify. Also, large businesses typically do not qualify for small business credit cards due to their size and financial complexity. Corporate cards are a better fit for such businesses.
— Phillip Parker, Founder, CardPaymentOptions.com
Jones said younger applicants may also be rejected.
“A 16-year-old who works as a babysitter doesn’t qualify for a business credit card,” Jones says, “but an individual who is over 18, has a substantial income and is legally incorporated as a business does.”
Conclusion
If you want to get a business credit card, be prepared to accurately report your annual business revenue. These figures can give credit card issuers confidence that you’re a low credit risk. If you’re a new business with no revenue to report, ask the issuer what you should report. And if your application for that coveted card is rejected, don’t worry. Apply with a different card issuer or wait until your efforts have paid off and your business is more established and your revenue is healthy.
The Bank of America content in this post was last updated on August 29, 2024.
