Business Credit Cards with Benefits for Startups in the UK

As an entrepreneur, you know the value of maintaining an adequate cash flow for establishing and growing a startup or small business. The right amount of money needs to come in, and an appropriate—ideally smaller—amount needs to go out where required.

For success, all initial and recurring costs must be figured out realistically. Besides cash, certain services like product integration tools, customer relationship management software, and competent databases may still be needed.

Some platforms have outperformed their peers in terms of providing the aforementioned services. Therefore, business owners must be careful when choosing from various companies providing these services.

Several options are generally available to startup founders to obtain capital during the early and growth stages. Whilst an efficient financial plan can power your startup in case you go for peer-to-peer lending, angel investment or crowdfunding, you might still need a business credit card for additional financial support.

Importance of Business Credit Cards

A business credit card is like a standard credit card but has limits and rewards tailored to the client’s needs. It does not cater to personal or non-business purchases.

A business credit card makes it easier to keep a separate record of your personal and business expenses. Its features also include gaining less costly capital, avoiding collateral, customising financial perks for your business, and providing a safety cushion in a financial emergency.

Reasons to use a business credit card include low APRs and minuscule fees for the card provider. Cashback and bonuses are also often higher for business credit cards as they tend to drum up a lot more business. 

Let’s look at some of the best business credit cards for startups and their main features.

Best Business Credit Cards for Startups

Many business cards are available for startups and small businesses on the market. However, some business credit cards are ahead of the curve in terms of quality, features, and reliability. Here are the three best business credit cards that startups and SMEs can use.

Capital On Tap 

The Capital On Tap credit card allows you to apply in under two minutes and receive approval immediately. It has a credit limit of up to £150,000, whilst the funding limit can be adjusted to meet the business growth demands. It offers a 0% annual fee for basic cards and no account management fees. The number of cards for any startup company is also unlimited. It also carries an APR as low as 9.9%. 

One of the most exciting features of Capital On Tap cards is 56 days of purchases for users without any interest. In addition, there are no foreign transaction (FX) fees and no charges for UK ATMs. It is also highly rated on Trustpilot—4.6 out of 5.

This business card lets you join your business perks to redeem points for Avios, i.e., discounted flight tickets, hotel stays, etc. The company promises to deliver its business credit cards within four days.

It is providing its services to UK companies with a minimum turnover of £2,000 and no unsatisfied County Court Judgements against them in the previous year.

Debite

Debite is a dynamic financing platform assisting startups in infancy to grow by providing them with fast, flexible, and affordable funding. Debit Business Credit Card is designed specifically for startups and their needs. Founders of the company realised that existing financing options were not able to meet the needs of a startup at early stages, so they have built Debite.

Startups can apply in 5 minutes. Within 24 hours of application, they can have Debite business credit cards up to a £250,000 limit, offering instalment options starting from 3 months up to 12 months. Debit also offers a rewarding 4% cashback. 

It takes pride in its built-in instalments plan whilst providing up to 20 times higher credit limits than traditional banks. The built-in feature helps to spread credit card transaction costs over 3 to 12 months.

Debite has efficiently addressed the startup requirements by providing financial assistance at the three identified funding stages and attractive investment plans. In addition, it comes to its user’s aid during the three funding stages.

Series A, B, and C funding are three stages of investment after pre-seed and seed funding. Startups struggle to find Series A funding and get out of the “Series A crunch.” However, securing financing with Debite can help startups go through this phase relatively smoothly. During Series B and C, startups can elongate their runway and reduce their burn rate through similar options.

Debite business credit card can help you save up to 30% on your SaaS subscriptions. It asks for no foreign transaction fees where a VISA card is accepted. Instalment costs are as low as 0.79% per month. It lets users know how much they save annually by switching from SaaS subscriptions via a Saas savings calculator.

Debite is currently operational for UK companies with a three-month trading history and a £5,000 monthly revenue or at least £50,000 cash in the bank account.

Cashplus

Cashplus is an FCA-regulated company providing business credit cards. It offers a 1% cash back on the first £100,000 of eligible card purchases each month. It also mentions purchases on which cashback is not available. It offers interest rates as low as 19% per annum, which can vary depending on the purchases.

It provides an appealing feature of a Digital Health Check to let users gauge whether their businesses meet the criteria of the evolving market, such as being more digital, online, and providing remote services. This Small and Medium Business (SMB) Digital readiness score is designed by MasterCard and incorporated by Cashplus in its features. 

The company puts a £50 credit limit per ATM withdrawal and £150 in a single day. Cashplus can also increase the credit limit if startups meet their eligibility criteria. There is also a £12 late payment fee if you fail to make at least the minimum payment before the due date. Interest will also be charged if the 30-day limit is exceeded.

The startup owner has to be a UK resident with a registered company and over 18 to be eligible for its MasterCard business credit card. 

Conclusion

Business credit cards come with their pros and cons. As mentioned above, business cards offer easier cash management and even APRs as low as 0%. Still, they require users’ personal guarantees and financial history to provide their services. It can lead to strict restrictions on the users’ ability to get further business loans and liabilities on their personal credit spending in case their business credit score gets below the bare minimum. 

Interest rates are also slightly more volatile than traditional consumer credit cards. Qualifying for some business credit cards is in itself a challenge. In case your startup or business fails, the company’s debt may become your personal liability. 

Still, if the startups want to charge ahead with their goals and ambitions, they should capitalise on the additional benefits over traditional business loans and utilise all the perks that business credit cards such as Debite offer-12 months instalments, 4% cashback, and 20 times higher limits.

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