3 min
How to Get a Small-Business Credit Card for Your Side Hustle
If you've started a side gig to earn extra income, you may be considering applying for a small-business credit card. While the application process is relatively quick, there are a few additional questions specific to business credit cards that you’ll need to answer. Being prepared with the right information beforehand can make the process smoother and faster.
Summary
If you've started a side gig to earn extra income, you may be considering applying for a small-business credit card. While the application process is relatively quick, there are a few additional questions specific to business credit cards that you’ll need to answer. Being prepared with the right information beforehand can make the process smoother and faster.
✨ Selecting Your Business Structure
Your business structure affects your tax filing process and financial liability. Many side hustles begin as sole proprietorships, but this can evolve as the business grows.
Takeaways:
• Different business structures include sole proprietorship, partnership, corporation, limited liability company (LLC), and nonprofit.
Key Terms
• Sole proprietorship: A business owned and operated by one person without formal incorporation.
• Partnership: A business shared by two or more owners.
• Corporation: A legal entity separate from its owners, with specific tax and stock regulations.
• Limited liability company (LLC): A business structure that protects members from personal liability.
• Nonprofit: A tax-exempt entity focusing on charitable, educational, or scientific work.
🌟 Sharing Your Business Name
If your business is registered with a legal name, use it in the application. Otherwise, you can enter your own name. This name will often appear on the business credit card.
Takeaways:
• Legal business names should be used when applicable, otherwise, your own name can suffice.
Key Terms
• Legal business name: The officially registered name of a business.
💰 Understanding Annual Revenue
Annual revenue refers to the gross revenue your business earned in the previous year before any deductions. If your business is new and hasn’t earned revenue yet, you can enter $0.
Takeaways:
• Report gross revenue before deductions.
• If your business is new, you can enter $0 without necessarily being disqualified.
Key Terms
• Gross revenue: The total income generated by a business before expenses and taxes are deducted.
📚 Choosing the Business Category and Type
When applying for a business credit card, you’ll need to specify your business industry through a series of drop-down menus. If none of the options seem to fit exactly, select the closest applicable category.
Takeaways:
• Select the business category that best describes your operations, even if it’s not an exact match.
Key Terms
• Business category: A general classification for a company's industry and type of work.
📍 Additional Information Required
Other details required include the length of time you’ve been in business, your business address, and your Employer Identification Number (EIN). Sole proprietors can use their Social Security numbers instead.
Takeaways:
• EIN is needed unless you operate as a sole proprietor, in which case you can use your SSN.
• Business address may be the same as your home address.
Key Terms
• Employer Identification Number (EIN): A unique identifier assigned to businesses by the IRS.
• Sole proprietor: A business owner who operates under their own personal name and SSN.
Conclusion
Applying for a small-business credit card requires some additional information compared to personal credit cards. Knowing your business structure, revenue, category, and legal details ahead of time can streamline the process and increase your chances of approval.
