 By ASAP Credit Card - Copyright © 2008
Credit
card companies recognize the potential of small and home-based businesses - the
driving force behind the U.S. economy. Small business credit cards are designed
specifically for these needs and are relatively easy to obtain. Corporations,
on the other hand, have a more difficult process to follow. Let's talk about them
both - coporate and small business credit cards:
Small Business Credit Cards
Small business credit
cards are designed specifically for the needs of small businesses. Once approved,
business owners are personally responsible for thier new credit card accounts.
Although multiple individuals can be approved as 'authorized users', responsibility
for payment falls solely on the primary account holders, normally the owner(s)
and/or manager(s), who may have to provide their personal information, such as
SSNs, if business credit isn't already established.
Although
there's definitely some minor differences from one small business card to the
next, most
offer the same basic features: an attractive APR, high credit limit
and simplified expense and account reporting. Depending on the card, you may also
have acess to cash discounts, frequent flier miles and other reward perks. Small
business owners who wish to apply for a business
credit card can simply submit an application through the mail, online or over
the phone.
Here are some of the main benefits associated
with business credit cards:
- Helps
regulate and control cash flow.
- Simplified
record keeping.
- The
ability to earn rewards and bonuses.
- High
credit limits.
- Emergency
protection.
- Easy to apply by mail,
phone or online.
* To learn more, see
our article on the benefits of business
credit cards >
Credit
Cards for Corporations
Credit cards
designed for corporations, nonprofit and government organizations are issued to
the corporations themselves and not to the individuals within the corporation.
Credit cards are issued in the name of the corporation, nonprofit or government
entity name, with officers of the corporation taking responsibility for payments.
American business laws consider a corporation an individual and the liability
is placed on the organization - not the individuals using the card.
To
obtain corporate credit cards, an authorized officer of the corporation must enter
into negotiations with the credit card company to work out specific details of
the agreement and to determine how it will integrate into their corporate financial
structure. Credit cards are then distributed to corporate employees who can purchase
on behalf of the company.
The most significant difference
between small business credit cards and corporate credit cards is the way payment
is made. Large companies and organizations often need to track, review, approve
and reimburse their employees travel and entertainment expenses. Instead of receiving
dozens of different hotel, rental car and restaurant bills each month from different
employees using various methods of payment, the company will receive one large
bill broken down in various ways - by type of charge, by employee name and by
date. With the complex expenses of a corporation, specialized software is generally
required to keep things straight.
Corporate vs. Small
Business Summary
- Small business credit
cards are prepackaged and advertised online and through the mail. Business owners
are personally responsible for repayment. Both small business and corporate credit
cards help break down expenses to assist with record keeping.
- Corporate
cards can only be obtained through complex negotiations. The corporation is liable
for all charges. Corporate credit cards go much further in expense reporting and
may even require customized software to help keep track.
*
See our complete list of our best business credit
cards >
Related Articles:
Even
More Credit Related Articles >
Comment Script
Visitor Comments:
|
