Business Credit Card No Credit, info?
I'm in the process of setting up a new limited liability company (some of you
may have seen a seperate VAT thread of mine) and for a few items of expenditure
it would be a heck of a lot easier if I had a credit card in the name of the company
that I could charge things to.
My working assumption is that I don't have a cat in hells chance of a newly formed
limited liability company with no trading history getting through a credit check and
hence getting a credit card. Is my assumption correct or has anyone managed to
accomplish this? If so then what pointers can you give me as to who to go to and
what to say?
One possible thought that I had was to act as a personal guarantor for the company
card but then, if I go to a bank and tell them that I'm setting up a business, then
surely they would then realise that my personal status is about to change to self
employed with zero years of accounts and zero immediate income so my personal
credit rating would also drop off the map for a while too. Then again, I would be
doing all the setup while I am still employed full time, I wonder if the banks/credit
agencies are too dumb to notice this!
Another desperate thought that occured to me is that I wouldn't need credit so I
would be perfectly happy with a Visa or Mastercard where I needed to pre-load
the card with a positive balance before a transaction would be authorized, i.e. if
I want to spend £100 then I need to first make a £100 payment to the card so that
when I make the purchase the balance won't drop below £0. I can't imagine that
any card issuers would go to the expense of putting this sort of system in place to
run this sort of scheme but maybe I'm wrong. If I am then I would be very interested
in finding out the names of banks that would do this.
Any personal experiences or advice would be gratefully received.
-I simply use a personal credit card which I dedicate totally to
company purchases, this simplifies accounting.
As far as I can see there's no disadvantages at all in doing this
(except, I suppose, my personal liability for the purchases). It's no
problem at all from the invoicing point of view, all invoices can
still be made out to my Ltd. company, it doesn't matter that it's paid
with a personal card.
In addition I have of course got a debit (Visa) card associated with
the company's business bank account but the company has to have money
in the bank to use that.
-I did manage to get one for a newly formed company, it is a LloydsTSB
Business Chargecard where the payment is automatically taken from the
company bank account middle of following month. Admittedly it was damn
diffucult, along the lines of my dad is a partner in a firm of chartered
accountants and it was a matter of him knowing the the local business team
and them authorising it knowing who he was. (Mind you reading yesterdays
papers about LloydsTSB maybe that isn't much of a suprise!!!) It does show
that all those business lunches with the various banks have some positive
effect.
I spent an afternoon phoning banks with the question "what is you policy on
issuing credit cards to limited companies" and the majority were minimum of
6 months trading history for a small credit limit reviewed after 2 years
accounts at which point I simply said good by and crossed them off the list.
Barclaycard Business would consider applications from new companies but were
talking a £250 starting point. Most banks demand you bank with them so they
can gauge account history which could put a spanner in the works. Abbey were
a quite attractive until I discovered no business credit card service.
I think most banks will issue proper visa debit cards to business customers
which are what are the equivlant of switch/maestro cards or what used to be
called delta cards, they have embossed numbers unlike Electron cards which
(IIRC as I haven't ever had one) have the numbers printed on the surface so
that they can't be used using manual or mechanical card systems and tend no
to be accepted online. I actually find it damn confusing having visa brand
on both debit and credit cards, I think mastercard international model is
better where they brand debit cards as maestro and credit cards as
mastercard.