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Your credit rating plays a huge role in the success of your small business. When you have bad credit, you may be unable to open lines of credit or get financing when you need it most.

Rather than go out of business or compromise your cash flow, you can get the financing you need and rebuild your score by using small business credit cards for bad credit. These bad credit small business credit cards can be a vital resource and an important stepping stone to ensuring the success and longevity of your company.

Secured Bank Credit CardsNo Credit

The Small Business Administration notes that out of the 63 percent of small business owners who apply for bank loans each year that only 27 percent are approved for financing. Simply put, banks continue to be antsy about making loans to businesses that may go into default.

When you want the security of borrowing from a bank without actually applying for an unsecured loan, you may reestablish credit for your small business by taking out a secured line of credit with your bank. This unique but valid type of loan requires that you deposit money into a savings account at the bank and then borrow the same amount against it.

The loan is backed by your savings account, ensuring that the bank can recoup its money if you default on the loan. As you repay the debt, the bank in turn reports your positive payment behavior to the credit bureaus.

Of course, this loan requires an upfront deposit from you. However, when you are more interested in rebuilding credit for your business, you may view this obligatory deposit as a worthwhile investment for the future of your business.

Secured Credit Cards

close-cardIf you do not already have a relationship with a bank, you can still open a line of credit and rebuild your payment history by taking out a secured credit card. These credit cards, like a secured bank card, requires that you pay an upfront deposit. The deposit can vary in price but typically averages around $100 to $400 depending on the line of credit being offered to you.

These cards also typically come with higher interest rates and yearly fees that may be prohibitive if you max out your line of credit. You should use these cards sparingly to avoid expensive penalties and fees that could compromise your cash flow. You also should only charge what you know your business can pay off each month. After establishing a positive payment history with the credit card lender, you may have a high enough score to open a new lower interest rate line of credit elsewhere.

A number of options exist for helping you rebuild your business’s bad credit and also getting the financing you need. These choices require a nominal upfront investment. However, they also can help you raise your score and establish a payment history that opens the possibility of opening credit or taking out loans with other lenders and banks.