12 Best Small Business Credit Cards of 2022

12 Best Small Business Credit Cards of 2022

The best business credit card is the Capital One Spark Cash Plus, for small business owners of all types. It lets you earn simple cash back at a high rate on all your purchases.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

Citi is an advertising partner

Top business credit cards of 2022

Best for sign-up bonus

Ink Business Preferred℠ Credit Card

On Chase's Secure Website

Best for miles

United℠ Business Card

On Chase's Secure Website

New to business credit cards?

Whether your business is a multimillion dollar company with dozens of employees or a small weekend "side hustle" for a little extra cash, you may qualify for a small business credit card. Businesses need access to credit, and having a small business credit card lets you separate personal and business expenses — plus many of the best business credit cards offer valuable rewards and perks.

Compare the best business credit cards of 2022

Welcome offer
Earning rate
Annual fee
Best for travel: The Business Platinum Card® from American ExpressEarn 120,000 Membership Rewards® points after you spend $15,000 on eligible purchases with your Card within the first 3 months of Card Membership.

This offer and/or promotion may have since changed, expired, or is no longer available.

5X Membership Rewards® points on flights and prepaid hotels on amextravel.com. Get 50% more Membership Rewards® points. That's an extra half point per dollar, on each eligible purchase of $5,000 or more.$695Read Review
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Best business credit card for travel

The Business Platinum Card® from American Express

Earn 120,000 Membership Rewards® points after you spend $15,000 on eligible purchases with your Card within the first 3 months of Card Membership.

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Our thoughts

The Business Platinum Card® from American Express is one of the best business cards for travel, as it offers an excellent suite of benefits for the traveling business owner. From access to the American Express Global Lounge Collection® at select airports to a Global Entry or TSA Precheck application credit, the card is a must for road warriors. We also love that the card earns 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com. Get 50% more Membership Rewards® points. That's an extra half point per dollar, on each eligible purchase of $5,000 or more. It also offers 35% of your points back when redeeming Membership Rewards for select tickets (enrollment required).

Other benefits — such as complimentary Hilton Honors Gold Elite status (enrollment required), a $200 semi-annual Dell credit (for up to $400 per year, enrollment required) and complimentary trip delay and cancellation insurance — round out the perks that help justify the card's high annual fee and make it one of the best company credit cards for the frequent traveler.

This offer and/or promotion may have since changed, expired, or is no longer available.

  • 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com. Get 50% more Membership Rewards® points. That's an extra half point per dollar, on each eligible purchase of $5,000 or more.
  • Access to the American Express Global Lounge Collection.
  • Up to $400 in Dell statement credits each year — up to $200 in statement credits between January and June, and another $200 in statement credits between July and December each calendar year. Enrollment required.
  • Up to $360 Indeed credit yearly when you enroll and make purchases with your card.
  • Up to $150 yearly credit for purchases made with your card toward annual prepaid plans for eligible Creative Cloud for teams and Acrobat Pro DC with e-sign. Enrollment required.
  • Up to $120 in statement credits per year for wireless telephone service purchases made directly with a wireless provider in the U.S. on your card. Enrollment required.
  • Up to $100 Global Entry or TSA PreCheck fee credit once every four years.
  • 35% of your Membership Rewards points back on first- or business-class travel on any airline or economy travel with your selected airline (enrollment required) when booked through amextravel.com and paid with points.
  • Complimentary Hilton Honors Gold status and Marriott Bonvoy Gold status (enrollment required).
  • Terms apply.
  • High $15,000 spend requirement to earn the card's welcome offer.
  • The $695 annual fee for the card can be hard to justify.
  • Terms apply.

Note, unlike typical credit cards, The Business Platinum Card® from American Express allows you to carry a balance for certain charges, but not all.


Best business credit card for startups

Brex 30

Partner perks worth over $150,000 toward services like Amazon Web Services, Google Ads, QuickBooks and UPS.

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Our thoughts

If you're a new startup looking for a large credit line to help get your business moving, then take a look at the Brex 30. One of the best business credit cards for new businesses, Brex claims to offer 10x to 20x higher credit limits than other lenders and doesn’t require a personal guarantee. The card doesn't offer a sign-up bonus, but it does provide rich earning rates and credits tailored toward a tech startup. The card lets you 8x on rideshare. 5x on Brex travel. 4x on restaurants. 3x on recurring software. 1x on the rest.. Points are worth $0.01.

However, the credits are what make this card truly attractive for a tech startup. Brex has partnered with numerous companies, offering partner perks worth over $150,000in value. One thing to note: Brex only offers its Brex For Startups to non-individual business entities. Corporate businesses (such as C-corps, S-corps, LLCs or LLPs) organized and registered in the United States are eligible for the Brex 30; sole proprietor and partnership business entities are ineligible.

  • Attractive earning rates tailored toward tech startups, including 8X points on ride-sharing, software and service credits.
  • Card does not require a personal guarantee.
  • $0 Annual Fee.
  • No traditional welcome offer or sign-up bonus.
  • Only corporations are eligible.
  • The rewards program and credits are tailored toward a niche market.


Best credit card for business expenses

American Express® Business Gold Card

Earn 70,000 Membership Rewards® points after you spend $10,000 on eligible purchases with the Business Gold Card within the first 3 months of Card Membership.*

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Our thoughts

The American Express® Business Gold Card offers a unique approach to rewards with its flexible categories, making it our pick for the best credit card to use for business expenses. Rather than lock you into specific categories, the card lets you Get 4X Membership Rewards® points on the 2 select categories where your business spent the most each month*. These categories are out of a selection of six: airfare, select U.S. media advertising, select U.S. technology providers, U.S. gas stations, U.S. restaurants and U.S. shipping purchases. The 4x earning rate is applied up to a maximum of $150,000 in annual combined spend over all categories.

The card earns valuable Membership Rewards points, which can be used for gift cards, airfare, hotel bookings and more, or transferred to an array of airline and hotel partners. The American Express® Business Gold Card also offers 25% back when using Pay with Points through American Express Travel. If your business has substantial expenses in any of the categories offered, the card can be highly rewarding.

This offer and/or promotion may have since changed, expired, or is no longer available.

  • Get 4X Membership Rewards® points on the 2 select categories where your business spent the most each month*.
  • Get 25% back when using Pay with Points with American Express Travel.
  • Extended warranty and 90-day accident and theft purchase protection on eligible covered purchases.
  • Foreign transaction fees: None.
  • Terms apply.
  • Cap on the number of points you can earn annually at the 4x rate.
  • Fairly high $295 annual fee.
  • Terms apply.

Note, unlike typical credit cards, the American Express® Business Gold Card allows you to carry a balance for certain charges, but not all.


Best business credit card for miles

United℠ Business Card

On Chase's Secure Website

$99

16.49% - 23.49% Variable

660 - 850

  • Earn up to 150,000 bonus miles
  • Earn 75,000 miles after you spend $5,000 on purchases in the first 3 months your account is open. Earn an additional 75,000 miles after you spend $20,000 total in the first 6 months.
  • Receive a 5,000-mile "better together" bonus each anniversary when you have both the UnitedSM Business Card and a personal United credit card.
  • Earn 2 miles per $1 spent on United purchases, dining (including eligible delivery services), at gas stations, office supply stores, and on local transit and commuting
  • Earn 1 mile per $1 spent on all other purchases. Plus, employee cards at no additional cost - miles earned from their purchases accrue in your account so you can earn rewards faster.
  • Enjoy a free first checked bag - a savings of up to $140 per roundtrip (terms apply), 2 United ClubSM one-time passes per year, and priority boarding privileges.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for one year with DashPass, DoorDash's membership service. Activate by 3/20/22.
  • $100 United travel credit after 7 United flight purchases of $100 or more each anniversary year.

Earn up to 150,000 bonus miles. Earn 75,000 bonus miles after you spend $5,000 on purchases in the first 3 months your account is open. Plus, earn an additional 75,000 bonus miles after you spend $20,000 total in the first 6 months your account is open.

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Our thoughts

The United℠ Business Card is one of the best business credit cards that earn miles. It offers a suite of excellent benefits for the frequent United Airlines traveler. The card lets you Earn 2 miles per $1 spent on United purchases, dining, at gas stations, office supply stores and local transit and commuting. Earn 1 mile per $1 spent on all other purchases. Other perks add significant value to the United Business Card, including a free checked bag for you and a companion, 25% off in-flight United purchases made with the card and a $100 credit after making qualifying United travel purchases. The United℠ Business Card also doesn't charge foreign transaction fees, saving you money while abroad. If you're a frequent traveler with United Airlines, the card will easily be worth its annual fee: $99.

You can use your United miles to book award tickets with United and their global partners. Plus, if you hold both the United℠ Business Card and a personal United credit card, you'll be rewarded with 5,000 anniversary bonus United miles.

  • Earn 2 miles per $1 spent on United purchases, dining, at gas stations, office supply stores and local transit and commuting. Earn 1 mile per $1 spent on all other purchases.
  • Travel benefits with United, including a free checked bag, priority boarding, 25% off in-flight purchases and two annual United Club passes.
  • $0 foreign transaction fees.
  • Charges an annual fee: $99.
  • Locks you into earning United miles rather than cash back or flexible points.


Best business credit card sign-up bonus

Ink Business Preferred℠ Credit Card

On Chase's Secure Website

Earn 100,000 bonus points after you spend $15,000 on purchases in the first 3 months from account opening.

$95

15.99%-20.99% Variable

720 - 850

  • Earn 100k bonus points after you spend $15,000 on purchases in the first 3 months from account opening. That's $1,000 cash back or $1,250 toward travel when redeemed through Chase Ultimate Rewards®
  • Earn 3 points per $1 on the first $150,000 spent on travel and select business categories each account anniversary year. Earn 1 point per $1 on all other purchases
  • With Fraud Protection your card transactions will be monitored for possible signs of fraudulent activity using real-time fraud monitoring
  • With Zero Liability you won't be held responsible for unauthorized charges made with your card or account information
  • Redeem points for cash back, gift cards, travel and more - your points don't expire as long as your account is open
  • Points are worth 25% more when you redeem for travel through Chase Ultimate Rewards®
  • Purchase Protection covers your new purchases for 120 days against damage or theft up to $10,000 per claim and $50,000 per account

Our thoughts

The Ink Business Preferred℠ Credit Card currently offers the best business credit card sign-up bonus of any small business card, worth a whopping $1,250 when redeemed for travel through the Chase Ultimate Rewards® portal. You can also transfer your Ultimate Rewards to any of the Chase travel partners, which can offer even more value.

Cardholders Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases—with no limit to the amount you can earn. Other benefits include trip cancellation and interruption insurance and an auto collision damage waiver when traveling for business purposes. The cellphone insurance against theft or damage is another extremely valuable benefit that can pay for the card's annual fee many times over if you damage your phone and have an eligible claim.

  • Excellent welcome offer.
  • Earn 3 points per $1 on the first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, advertising purchases made with social media sites and search engines each account anniversary year. Earn 1 point per $1 on all other purchases—with no limit to the amount you can earn.
  • Ability to transfer points to Chase Ultimate Rewards travel partners.
  • Valuable travel insurance protections and purchase coverage, including up to $600 in cellphone insurance per covered incident.
  • High purchase minimum of $5,000 within the first three months of opening your account to qualify — that could be steep for small firms or lean startups that have low expenses.
  • Moderate $95 annual fee.


Best business credit card for fair credit and easiest business credit card to get

Capital One® Spark® Classic for Business

Earn 1% Cash Back on every purchase with a $0 annual fee.

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Our thoughts

The Capital One® Spark® Classic for Business is designed for business owners with less-than-excellent credit who are looking to improve their credit score. This card only requires a credit score of Fair/Limited, making it one of the easiest business credit cards to get. It’s an excellent option that is free of extra fees or a security deposit requirement. You'll also earn 1% Cash Back on every purchase. Avoid carrying a balance, however, as you will incur a high 26.99% (Variable) APR .

We also love the fact that the card doesn't charge foreign transaction fees, a rare benefit among cashback cards without an annual fee. You can also obtain employee cards at no extra cost.

  • Available to those with average credit and can let you build or rebuild your credit score.
  • Foreign transaction fees: None.
  • $0 annual fee.
  • No fee to add employees to your account.
  • Card does not offer a welcome bonus.
  • Lackluster 1% Cash Back on every purchase.
  • High 26.99% (Variable) APR if you carry a balance.


Best business credit card with an intro 0% APR

American Express Blue Business Cash™ Card

Our thoughts

The American Express Blue Business Cash™ Card is one of the best small business credit cards that earns flat-rate cash back. You Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1%. Rewards can easily be redeemed for statement credits toward your purchases. This is an annual return of $1,000, if you max it out.

The card offers a $250 statement credit after you make $3,000 in purchases on your Card in your first 3 months. The card also doesn't charge an annual fee and offers an introductory APR of 0% on purchases for 12 months from date of account opening (a 13.24% - 19.24% Variable APR applies thereafter).

  • Earn 2% cash back on all eligible purchases on up to $50,000 per calendar year, then 1%
  • Intro 0% on purchases for 12 months from date of account opening (13.24% - 19.24% Variable thereafter).
  • No annual fee.
  • Terms apply.
  • The 2% cash back is capped at $50,000 in annual spend.
  • Non-standard welcome offer that may not be useful for all businesses.
  • Terms apply.


Best cashback business card

Capital One Spark Cash Plus

Earn up to a $3,000 cash bonus; $500 once you spend $5,000 in the first 3 months, and $2,500 once you spend $50,000 in the first 6 months of account opening

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Our thoughts

If you're looking for a business cashback card that doesn't have a cap on its rewards, the Capital One Spark Cash Plus could be exactly what you need. The card earns Unlimited 2% Cash Back on every purchase, with no limit on the annual spend — this makes it one of the best cashback business cards available. The card's sign-up bonus is highly enticing as well.

The card is especially rewarding for big spenders: You get a $200 cash bonus every year you spend $200,000 or more on the card.

The main issue with the card is its annual fee of $150, as there are other comparable cashback cards that do not charge an annual fee. Still, if your monthly expenses are significant (you’ll need to spend at least $7,500 per year to justify the annual fee) your annual rewards will more than pay for the card.

  • Earns unlimited 2% Cash Back on every purchase
  • Foreign transaction fees: None
  • Businesses who spend $200,000+ get a $200 cash back bonus each year
  • No preset spending limit — the card adapts to your spending behaviors
  • $150 annual fee
  • Welcome bonus may be difficult to earn for businesses without a lot of monthly expenses.
  • You have to pay the full balance each month or get a 2.99% late fee


Best business credit card with no annual fee

The Blue Business® Plus Credit Card from American Express

Our thoughts

The Blue Business® Plus Credit Card from American Express is a perennial favorite among business owners who highly value Membership Rewards points, but also want a card without an annual fee. Cardholders Earn 2X Membership Rewards® points on everyday business purchases such as office supplies or client dinners. 2X applies to the first $50,000 in purchases per year, 1 point per dollar thereafter. You can use the Membership Rewards points in all the typical ways, including transferring to travel partners.

We really like the fact that this card earns transferable bank points yet doesn't charge an annual fee. You'll also enjoy an intro APR of 0% on purchases for 12 months from date of account opening, then the card reverts to its standard 13.24% - 19.24% Variable APR.

  • Earn 2X Membership Rewards® points on everyday business purchases such as office supplies or client dinners. 2X applies to the first $50,000 in purchases per year, 1 point per dollar thereafter.
  • 15,000 Membership Rewards® points after you spend $3,000 in eligible purchases on the Card within your first 3 months of Card Membership
  • Introductory APR of 0% on purchases for 12 months from date of account opening (then a 13.24% - 19.24% Variable APR applies).
  • No annual fee.
  • Terms apply.
  • Annual spend for earning 2x points is capped at $50,000.
  • Relatively low welcome offer
  • Terms apply.


Best business credit card for hotels

The Hilton Honors American Express Business Card

Earn up to 180,000 Hilton Honors Bonus Points. Earn 130,000 Bonus Points after you spend $2,000 in purchases on the Hilton Honors Business Card in the first 3 months of Card Membership. Plus, you can earn an additional 50,000 Hilton Honors Bonus Points after you spend a total of $10,000 in purchases on the Card in the first 6 months.

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Our thoughts

The Hilton Honors American Express Business Card is our pick for the best business credit card for hotel rewards. If you stay at Hilton properties frequently for work, this card may be a great fit for your wallet, as it offers an array of valuable perks: These include complimentary Hilton Honors Gold Elite status (enrollment required), 10 complimentary Priority Pass lounge visits per year and the ability to earn a free weekend night — and even Hilton Diamond status by sufficient card spend (enrollment required).

The card has good earning rates as well, rewarding you with 12X at hotels and resorts in the Hilton portfolio, 6X on Select Business & Travel Purchases, 3X Everywhere Else. Terms & Limitations Apply. However, know that these benefits come with an annual fee of $95.

  • Elevated welcome offer.
  • Great earning rate on Hilton hotel stays.
  • Complimentary Hilton Gold elite status for as long as you keep your account open (enrollment required).
  • Ability to earn a free weekend night after $15,000 in annual spend, and Diamond status after $60,000 in annual spend (enrollment required).
  • Foreign transaction fees: None
  • Terms apply.
  • Locks you into earning points with a specific hotel program.
  • $95 annual fee.
  • Terms apply.


Best startup business credit card with no credit

First Progress Platinum Prestige Mastercard® Secured Credit Card

No credit history or minimum credit score required for approval.

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Our thoughts

The First Progress Platinum Prestige Mastercard® Secured Credit Card is one of the best startup business credit cards for no credit. It doesn't come with many bells and whistles, but if you're wondering how to start a business with no credit, this business credit card is a great option. Perhaps the best benefit of this card is that there is no credit history or minimum credit score required for approval — and it is difficult to find a business credit card that doesn’t require a minimum score. If you're looking for a business credit card for bad credit, you should definitely give this card a closer look.

This card also comes with a 9.99% APR for purchases, which is extremely low relative to what other cards charge. Note that the First Progress Platinum Prestige Mastercard® Secured Credit Card offers a revolving credit line based on your refundable security deposit.

  • No credit history or minimum credit score required for approval
  • Very low variable APR
  • Accepted nationwide
  • Requires a refundable security deposit
  • $49 annual fee
  • Lacks rewards or other benefits


Best balance transfer credit card for small businesses

U.S. Bank Business Platinum Card

Intro APR 0% intro APR on purchases for 18 billing cycles on purchases and 0% intro APR on balance transfers for the first 20 billing cycles on balance transfers. After that, an APR of 11.99%-20.99% Variable applies.

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Our thoughts

The U.S. Bank Business Platinum Card offers a fantastic deal on balance transfers. This 0% balance transfer business credit card charges a $0 annual fee and comes with useful business features including the ability to track spending and manage your expenses more efficiently with Visa Business Reporting. In order to be approved for this card, you must be able to meet the U.S. Bank Business Platinum Card credit score requirement of Excellent.

However, the major downside to the U.S. Bank Business Platinum Card is that beyond its balance transfer offer, it doesn't offer any rewards or many other exciting perks. Regardless, this is still one of the best business credit cards for balance transfers available.

  • $0 annual fee
  • Excellent intro APR offer on purchases and balance transfers
  • No other significant perks or rewards

How to choose a business credit card

  1. Decide which type of card your business will benefit most from: If you're hoping to rack up hotel points or airline miles, consider choosing a rewards card for your small business. If you'd rather earn cash back on your purchases, you'd be better suited for a cashback card.
  2. Decide what type of perks you're interested in: Are you looking for a card with a generous sign-up bonus? Are you interested in luxury benefits? Travel perks? Lounge access? These are all things to consider when choosing the best business credit card for your needs.
  3. Identify your business' spending habits: If you know your business tends to have the most expenses in certain spending categories, you'll want to choose a card that offers bonus rewards in those specific categories.
  4. Are you willing to pay an annual fee? The cost of your small business credit card needs to be weighed against its annual fee. If your business is looking to cut costs, you may want to consider a no annual fee card.
  5. Are you willing to risk a higher APR? Businesses that fail to pay off their credit card balance in full every month should opt for a card with a low or 0% intro APR offer.
  6. Does the card require a personal guarantee? Many issuers require a personal guarantee for their small business credit cards. If you don't feel comfortable assuming personal liability for your business credit card, you'll want to seek out a card without a personal guarantee requirement.
  7. Will you benefit from business-specific perks? Top business credit cards offer items like free employee cards and discounts on shipping or business travel. Choose a card that offers perks that will benefit your business the most.
  8. Do you need other cardholder benefits? Premium cards typically offer an array of travel benefits, such as complimentary hotel status and airport lounge access. Some cards offer annual credits at various merchants or in specific categories. If you travel abroad for work, you'll also want to find a card that doesn't charge foreign transaction fees.

In many ways, finding the best small business credit card is much like finding the top consumer card. There are some questions you should ask yourself: What sorts of expenses do I have? Do I need to make a large purchase as I start my business? Will I need employee cards? Here are some factors to consider before making a decision on the best business credit card for your unique situation.

1. Decide which type of card your business will benefit most from

Business credit cards can be segmented into the following types — you’ll need to decide which of these best meets your needs:

Decide which type of card your business will benefit most from
Points and miles cardsGood for: frequent business travelers
Cashback cardsGood for: businesses with high expenses, especially in business-specific spending categories
Balance transfer cardsGood for: business owners already carrying a balance on another credit card

A: Earn points and miles

If you travel frequently, a card that earns points or miles could be a good fit for you. You’ll need to decide whether airline miles, hotel points or flexible points will be more useful to you:

  1. Airline miles: Credit cards that earn airline miles can save frequent business travelers money on flight tickets and often come with travel perks like free checked bags or airport lounge access. You need to travel frequently with the airline to get the value out of the card’s perks and awards — otherwise, you’re better off with a general travel card or a cashback card.
  2. Hotel points: Hotel-branded credit cards can earn cardholders free nights and special hotel perks like room upgrades or free breakfast. If you don't typically stay with one particular hotel brand, or you don’t stay in hotels at all when you travel, you may want to choose a cash back or other type of rewards card instead.
  3. Bank rewards program points: Credit cards associated with a particular bank often offer their own rewards program that earn cardholders either cash back or rewards points. For cardholders who don’t want to be stuck with a particular hotel or airline program, these can be a better option. You can generally use these points for travel with any airline or hotel. Some cards even allow you to transfer points into other airline and hotel loyalty program accounts.

B: Earn cash back

Cashback cards earn cardholders cash back on every purchase made with the card. The amount of cash back earned can depend on the spending category of your purchase. Typically these types of cards are lucrative and are much more flexible with their rewards than travel rewards cards (you can basically use cash back any way you please) — plus, they’re an especially good option if you don’t travel often. The downside is that you don't have the option to maximize your rewards value like you would for a points or miles-earning credit card.

C: Balance transfer cards

Balance transfer cards can be especially useful for small businesses owners who are already carrying significant amounts of debt on another credit card. You can transfer your debt onto your credit card to take advantage of the low to no percentage APR these types of cards offer.

2. Decide what type of perks you're interested in

The sign-up bonus or welcome offer for a new credit card is often one of the most attractive features, the carrot that lenders dangle in front of prospective borrowers. Whether the bonus consists of cash back, airline miles, hotel points or some other reward, make sure you understand the value of the sign-up bonus. You may need to look up the value of airline miles, bank points or hotel points to help determine how much a bonus offer is worth.

If you're looking for items like luxury travel benefits and lounge access, there are plenty of options for business cards that offer all different types of perks.

3. Identify your business' spending habits

Another critical factor to consider when picking the best small business credit card for your needs is what bonus earning categories it offers. For businesses with expenses in niche categories, such as advertising or travel, some cards may offer much better rewards. Meanwhile, those with a large variety of expenses may find cards with flat-rate earning to be a better choice.

Typical bonus categories for many business credit cards include:

  • Travel
  • Restaurants
  • Office supply stores
  • Shipping
  • Advertising
  • Gas stations

Some of the cards in our list of best business credit cards offer bonus earnings in these common categories.

4. Are you willing to pay an annual fee?

The cost of your small business credit card needs to be weighed against the annual fee. If your monthly spending is small, it’s usually better to opt for a small business credit card without an annual fee. Though if your business expenses are larger, you may be completely able to justify a card with an annual fee, even one as high as the $695 commanded by The Business Platinum Card® from American Express, which also offers many valuable travel perks.

Ultimately, you'll want to ensure that the rewards and perks provided by your small business credit card fully justify the annual fee.

5. Are you willing to risk a higher APR?

Businesses that fail to pay off their credit card balance in full every month should opt for a card with a low or 0% intro APR offer. That's because carrying a balance on your card means your business will have to pay costly interest fees, which often outweigh any rewards offered by a small business card. A card with a low or 0% intro APR will waive the interest for a certain time period (typically six to 12 months) on purchases, balance transfers or both.

A business that pays its credit card balances off in full every month doesn't need to consider APR as carefully, as the balances won't accrue interest.

6. Does the card require a personal guarantee?

Most issuers require a personal guarantee for their small business credit cards, so you'll need to decide if this is something that you are willing to bear. A personal guarantee makes you personally responsible for the debt rather than it being borne strictly by a separate corporate entity. In the event the business fails, you'll still be liable for the debt. Issuers will typically be looking for a business to have $1 million or more in annual revenue to be considered for a card without a personal guarantee.

The reason that most issuers require a personal guarantee is that it protects the issuer from loss. Nearly half of businesses fail within the first five years, and lenders could be stuck with a large amount of unpaid business debt unless they made borrowers personally responsible for the debt.

7. Will you benefit from business-specific perks?

There are some specific business benefits that you may want to ensure your selected card offers. If you have employees, you may want a card that offers employee authorized user cards at no extra cost. Most of the best business credit cards do, but some will charge a fee for employee authorized users. Being able to track and monitor employee spending is one excellent reason to have a business credit card.

8. Do you need other cardholder benefits?

Business credit cards sometimes offer other cardholder benefits. Premium cards, such as the Business Card from American Express, offer an array of travel benefits, such as complimentary hotel status and airport lounge access. Some cards offer annual credits at various merchants or in specific categories. If you travel abroad for work, you'll also want to find a card that doesn't charge foreign transaction fees.

Some of the benefits only apply to business expenses or travel. For example, the primary rental car collision damage waiver benefit of the Chase Ink Business Preferred℠ Credit Card only applies when the car is rented for business or commercial purposes.

How to get a business credit card

You'll need to have a business in order to qualify for a business credit card. Even if you're an online freelancer or operate a service business without a brick-and-mortar storefront, your business can certainly qualify for a small business credit card. Here are the steps you'll need to take to get a business credit card:

  1. Determine your personal or business credit score. For business credit cards backed by a personal guarantee, you'll need to know your personal credit score to help determine your eligibility. This is typical for sole proprietorships. Many of the best business credit cards require an excellent credit score, typically over 720. For businesses with a business credit profile, your eligibility will be based on your business credit profile instead.
  2. Decide which small business credit card meets your needs. There are many business credit cards on the market, although the choices are more limited than consumer cards. We suggest you review our list above of the best business credit cards.
  3. Gather application information. You'll need either your Employer Identification Number (EIN) or your Social Security number (SSN) to apply for a business credit card (many sole proprietorships do not have an EIN). You'll also need to provide details, such as legal business name, entity type, annual business income, business address, phone number and other important items.
  4. Complete your application and follow up. Once you submit your application, you may receive instant approval or it may need to be further reviewed. In some cases, the bank will follow up with a request for additional information, such as a DBA statement or business bank account information. The card issuer may approve your application after review, or may deny it altogether.

If your card application is approved, the card will be mailed to you and you'll need to activate it, just like with a personal credit card.

How to use a business credit card

Here are some best practices for using a business credit card:

  • Use your card strictly for business expenses. One of the roles of a business credit card is to be able to keep personal and business expenses separate.
  • Make as many business transactions as you can using your card. If you have a rewards-earning credit card, this allows you to maximize your return.
  • Decide who should have a business credit card. If you have employees, decide the metrics for who will be issued a card and why.
  • Use the end-of-year financial report tools available with many business credit card products. This will make expense reporting at tax time much easier.
  • Like with personal cards, always pay off your business credit card every month. Carrying a balance will result in interest charges.
  • Don't miss a payment! Business credit cards are not subject to the same protections as personal credit cards, and issuers can increase your interest rate substantially.

What is a business credit card?

A business credit card is a credit card intended for business use rather than personal use.

Business credit cards help keep personal and business expenses separate, but they otherwise function much like a personal credit card, providing convenience and the ability to easily track spending. Businesses of all sizes, from sole proprietorships to corporations, can be eligible for a business credit card.

Business credit cards vs. personal credit cards

In general, business credit cards function just like personal credit cards. Both are used for purchases, typically have a credit limit and accrue interest, and may offer rewards to the cardholder. Bonus categories may be different between personal and business credit cards: Business credit cards are often geared more toward business expenses, such as office supply purchases, while personal credit cards may have grocery stores as a bonus category.

There are several differences between business and personal credit cards:

  1. Business credit cards do not offer the same level of consumer protections that personal credit cards do. The CARD Act of 2009 requires issuers to provide more transparency on their rules and placed limits on when fees can be increased and how finance charges can be calculated. Some issuers (notably Bank of America) offer protections on their business card products, but it is up to you to understand the terms of the card agreement.
  2. Business credit card accounts typically report to a separate business credit report than personal cards. However, some issuers choose to report activity to the consumer bureau as well. Sometimes only negative information, such as missed payments, will be reported to the consumer bureau. Notably, Discover and Capital One business credit cards report to both personal and commercial bureaus.
  3. You will potentially need to submit an Employer Identification Number (EIN) on your business credit card application. For businesses with an EIN, you'll need to include this. For businesses without an EIN (typically single-member LLCs and sole proprietorships), you can use the Social Security number of the business owner. In either case, your business name can be printed on the business credit card.
Benefit
Business credit card
Personal credit card
Can make purchases
Earns rewardsGeared towards business purchasesGeared toward personal purchases
Consumer protectionsPartial protections offered by some issuers, but not all
Credit reportingSometimes reports to a separate business credit report, sometimes also reports to consumer bureausReports to consumer bureaus
Employer Identification Number (EIN) requiredSometimes requiredNot required

Building a business credit profile

Business credit can be developed independently of personal credit, and it’s important to know how to build it. Your business credit profile will inform lenders how creditworthy your business is. It will influence the rates and terms on loans, your business's ability to qualify for financing and even business insurance premiums.

  1. To be able to build a business credit profile, your business must be incorporated as a separate legal entity from the owner. This can be a C corporation, S corporation or LLC. You'll also need to apply for an EIN, and open business banking accounts and a phone line.
  2. Business credit scores follow a different scale than consumer credit scores and you'll need to know how to read them, as well as how to read your business credit report. There are two credit reporting agencies that track both personal and business credit profiles: Equifax and Experian. However, the scores and profiles are separate. There are other bureaus, including Dun & Bradstreet and FICO SBSS, that only track business credit profiles and scores.

Should you get a business credit card?

Get a small business credit card if you have business charges that you can pay by credit card and you are able to pay off your expenses every month.

Your small business credit card will earn you valuable rewards on all your business purchases, as well as offer your convenience and security just like a personal credit card.

Eligibility: If you are the owner of a small business — even if you are an online freelancer — you are certainly eligible for a small business credit card.

One great benefit of a business credit card is to allow you to keep your business expenses and personal expenses separate. Many business credit cards make financial reporting extremely easy at the end of the year, as they provide detailed itemized and categorized reports for when tax time rolls around.

Know the effects on your credit score

When you apply for a business credit card, be aware that the issuer will also likely run a hard check on your personal credit report, which can affect your personal credit score. That's why it's important to make sure you know what credit score is needed for a business credit card before applying to ensure you'll be approved. However, your business credit line and your personal credit lines will be completely separate so your spending on your business credit card won't affect your personal credit usage.

Before you commit to a business credit card, find out whether or not the issuer reports to consumer credit bureaus. If the card does report to consumer credit bureaus, your business credit card activity will likely affect your personal credit score. That said, there are plenty of business credit cards that don't pull personal credit, so be sure to do your research ahead of time if it's something you're concerned about.

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Business credit card FAQs

What is the best business credit card for my business?

There is no single best small business credit card for all businesses, as each business is different. Check out the above list of best business credit cards for one that meets your particular business needs.

Do business credit cards affect personal credit?

Hard inquiries from business card applications will appear on your personal credit report for small business credit cards where there is a personal guarantee (which the majority of cards require). Recent inquiries can negatively impact your credit score. However, most business credit cards do not report to personal credit bureaus.

How do business credit cards work?

Small business credit cards work essentially the same as personal credit cards. They are intended for business expenses and allow you to keep your business financials separate from your personal financials.

Can you get a business credit card without a business?

You must have a business to get a business credit card. However, your business can be a freelancing gig or "side hustle" that you only do part time.

Do business credit cards build credit?

Business credit cards can build your personal credit if they report to the personal credit bureaus.

Who can get a business credit card?

Anyone with a small business can potentially be eligible for a small business credit card. The small business does not need to be your full-time employment.

Can a sole proprietor get a business credit card?

Yes, sole proprietors can get a small business credit card.

Can I get a business credit card with bad credit?

There are some credit cards available for businesses or business owners with poor credit. The Capital One® Spark® Classic for Business (among those on our list of best business credit cards) is an option for business owners with Fair/Limited credit.

Can I use a credit card to start a business?

While it is possible to use a credit card to finance your business startup, this is generally a risky proposition. Still, you would absolutely want to obtain a credit card with a 0% APR if you are using it to start a business.

Can I use a personal credit card for business?

Yes, you can use a personal credit card for business purposes. However, you may miss out on some of the benefits from having a small business credit card. You also have to be careful about mixing personal and business expenses on the same card.

Can I use a business credit card for personal expenses?

While it is not illegal to use a business credit card for personal expenses, it is often against the account terms, and the issuer may have grounds to close your account. You would also likely be mixing personal and business expenses on the same card, which is a bad practice.

Recap of the best business credit cards of 2022

Expert Insights to Help You Make Smarter Financial Decisions

ValuePenguin has curated an exclusive panel of professionals, spanning various areas of expertise, to help dissect difficult subjects and empower you to make smarter financial decisions. Read on for more credit card insights.

  1. What are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?
  2. What advice do you have for entrepreneurs to keep their personal funds separate from business expenses?
  3. In your opinion, should businesses keep a close eye on their credit scores when providing business credit cards to their employees? Why or why not?
  4. How would you expect the demand for business travel to change in the next two years?

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  • Marc Compeau
  • Professor of Practice, Innovation and Entrepreneurship
  • Read Answer

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The commentary provided by these industry experts represent their viewpoints and opinions alone.

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Read on for more credit card insights.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeList--root\"\u003E\n\n \u003Cdiv class=\"ShortcodeList--content ShortcodeList--content-margin\"\u003E\n \u003Cdiv class=\"ShortcodeList--column\"\u003E\n \u003Col class=\"ListOrdered--root\"\u003E\n \u003Cli class=\"ListOrdered--list-item\"\u003EWhat are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?\u003C\/li\u003E\n \u003Cli class=\"ListOrdered--list-item\"\u003EWhat advice do you have for entrepreneurs to keep their personal funds separate from business expenses?\u003C\/li\u003E\n \u003Cli class=\"ListOrdered--list-item\"\u003EIn your opinion, should businesses keep a close eye on their credit scores when providing business credit cards to their employees? 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Stasio Jr.\u003C\/strong\u003E\n \u003C\/li\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n Associate Professor\n \u003C\/li\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cspan\u003E\u003Ca class=\"ShortcodeLink--root ShortcodeLink--black\" title=\"Read Answer\" href=\"#expert-joseph-stasio\"\u003ERead Answer\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/li\u003E\n \u003C\/ul\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeVisibility--show-small\"\u003E\u003C\/p\u003E\n\n\u003Chr\u003E\n\n\u003Cp\u003E\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"third pad-half align-left clearfix\"\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeImage--root left\" \u003E\n \u003Cdiv class=\"ShortcodeImage--image-container \"\u003E\n \u003Cimg alt=\"headshot of expert\" class=\"ShortcodeImage--image lazyload\" style=\"width: 80px;\" 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data-src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_80\/v1\/sean-wise_bofwya\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,e_blur:1000,f_auto,h_1600,q_1,w_80\/v1\/sean-wise_bofwya\" data-srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_80\/v1\/sean-wise_bofwya 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,f_auto,h_1600,q_auto,w_80\/v1\/sean-wise_bofwya 2x\"\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeList--root \"\u003E\n\n \u003Cdiv class=\"ShortcodeList--content\"\u003E\n \u003Cdiv class=\"ShortcodeList--column\"\u003E\n \u003Cul class=\"ListUnordered--root ListUnordered--plain\"\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cstrong\u003ESean Wise, Ph.D.\u003C\/strong\u003E\n \u003C\/li\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n Associate Professor\n \u003C\/li\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cspan\u003E\u003Ca class=\"ShortcodeLink--root ShortcodeLink--black\" title=\"Read Answer\" href=\"#expert-sean-wise\"\u003ERead Answer\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/li\u003E\n \u003C\/ul\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeVisibility--show-small\"\u003E\u003C\/p\u003E\n\n\u003Chr\u003E\n\n\u003Cp\u003E\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"third pad-half align-left clearfix\"\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeImage--root left\" \u003E\n \u003Cdiv class=\"ShortcodeImage--image-container \"\u003E\n \u003Cimg alt=\"headshot of expert\" class=\"ShortcodeImage--image lazyload\" style=\"width: 80px;\" data-src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_80\/v1\/john-mulane_smouas\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,e_blur:1000,f_auto,h_1600,q_1,w_80\/v1\/john-mulane_smouas\" data-srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_80\/v1\/john-mulane_smouas 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,f_auto,h_1600,q_auto,w_80\/v1\/john-mulane_smouas 2x\"\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeList--root \"\u003E\n\n \u003Cdiv class=\"ShortcodeList--content\"\u003E\n \u003Cdiv class=\"ShortcodeList--column\"\u003E\n \u003Cul class=\"ListUnordered--root ListUnordered--plain\"\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cstrong\u003EJohn Mullane\u003C\/strong\u003E\n \u003C\/li\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n Professor\n \u003C\/li\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cspan\u003E\u003Ca class=\"ShortcodeLink--root ShortcodeLink--black\" title=\"Read Answer\" href=\"#expert-john-mullane\"\u003ERead Answer\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/li\u003E\n \u003C\/ul\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeVisibility--show-small\"\u003E\u003C\/p\u003E\n\n\u003Chr\u003E\n\n\u003Cp\u003E\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"third pad-half align-left clearfix\"\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeImage--root left\" \u003E\n \u003Cdiv class=\"ShortcodeImage--image-container \"\u003E\n \u003Cimg alt=\"headshot of expert\" class=\"ShortcodeImage--image lazyload\" style=\"width: 80px;\" data-src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_80\/v1\/expert-advice-headshots_sfuxjr\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,e_blur:1000,f_auto,h_1600,q_1,w_80\/v1\/expert-advice-headshots_sfuxjr\" data-srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_80\/v1\/expert-advice-headshots_sfuxjr 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,f_auto,h_1600,q_auto,w_80\/v1\/expert-advice-headshots_sfuxjr 2x\"\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeList--root \"\u003E\n\n \u003Cdiv class=\"ShortcodeList--content\"\u003E\n \u003Cdiv class=\"ShortcodeList--column\"\u003E\n \u003Cul class=\"ListUnordered--root ListUnordered--plain\"\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cstrong\u003ELatisha Nixon-Jones\u003C\/strong\u003E\n \u003C\/li\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n Assistant Professor\n \u003C\/li\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cspan\u003E\u003Ca class=\"ShortcodeLink--root ShortcodeLink--black\" title=\"Read Answer\" href=\"#expert-latisha-nixon-jones\"\u003ERead Answer\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/li\u003E\n \u003C\/ul\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n\n\u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Chr\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"full pad-none align-left clearfix\"\u003E\n\u003Cdiv class=\"third pad-half align-left clearfix\"\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeImage--root left\" \u003E\n \u003Cdiv class=\"ShortcodeImage--image-container \"\u003E\n \u003Cimg alt=\"headshot of expert\" class=\"ShortcodeImage--image lazyload\" style=\"width: 80px;\" data-src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_80\/v1\/expert-advice-headshots_sfuxjr\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,e_blur:1000,f_auto,h_1600,q_1,w_80\/v1\/expert-advice-headshots_sfuxjr\" data-srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_80\/v1\/expert-advice-headshots_sfuxjr 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,f_auto,h_1600,q_auto,w_80\/v1\/expert-advice-headshots_sfuxjr 2x\"\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeList--root \"\u003E\n\n \u003Cdiv class=\"ShortcodeList--content\"\u003E\n \u003Cdiv class=\"ShortcodeList--column\"\u003E\n \u003Cul class=\"ListUnordered--root ListUnordered--plain\"\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cstrong\u003EEdward E. Ackerley\u003C\/strong\u003E\n \u003C\/li\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n Adjunct Instructor\n \u003C\/li\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cspan\u003E\u003Ca class=\"ShortcodeLink--root ShortcodeLink--black\" title=\"Read Answer\" href=\"#expert-edward-ackerley\"\u003ERead Answer\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/li\u003E\n \u003C\/ul\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeVisibility--show-small\"\u003E\u003C\/p\u003E\n\n\u003Chr\u003E\n\n\u003Cp\u003E\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"third pad-half align-left clearfix\"\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeImage--root left\" \u003E\n \u003Cdiv class=\"ShortcodeImage--image-container \"\u003E\n \u003Cimg alt=\"headshot of expert\" class=\"ShortcodeImage--image lazyload\" style=\"width: 80px;\" data-src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_80\/v1\/expert-advice-headshots_sfuxjr\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,e_blur:1000,f_auto,h_1600,q_1,w_80\/v1\/expert-advice-headshots_sfuxjr\" data-srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_80\/v1\/expert-advice-headshots_sfuxjr 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,f_auto,h_1600,q_auto,w_80\/v1\/expert-advice-headshots_sfuxjr 2x\"\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeList--root \"\u003E\n\n \u003Cdiv class=\"ShortcodeList--content\"\u003E\n \u003Cdiv class=\"ShortcodeList--column\"\u003E\n \u003Cul class=\"ListUnordered--root ListUnordered--plain\"\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cstrong\u003EJoe Roberts, Ph.D.\u003C\/strong\u003E\n \u003C\/li\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n Director\n \u003C\/li\u003E\n \u003Cli class=\"ListUnordered--list-item\"\u003E\n \u003Cspan\u003E\u003Ca class=\"ShortcodeLink--root ShortcodeLink--black\" title=\"Read Answer\" href=\"#expert-joe-roberts\"\u003ERead Answer\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/li\u003E\n \u003C\/ul\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n\n\u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeDisclaimer--root ShortcodeDisclaimer--root \"\u003E\n \u003Cdiv class=\"ContextualDisclaimer--root\"\u003E\n \u003Cp class=\"ContextualDisclaimer--copy\"\u003E\n \u003Cp\u003EThe commentary provided by these industry experts represent their viewpoints and opinions alone.\u003C\/p\u003E\n\n \n \u003C\/p\u003E\n\u003C\/div\u003E\n\n\u003C\/div\u003E\n\n","padding":"double"}
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Bradley Poulos

Lecturer, Entrepreneurship and Strategy, Ryerson University

What are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?

Most entrepreneurs have very little or no network in the financial investment community and have to build one from scratch. They also lack a deep understanding of how the startup funding world operates, or what appeals to investors, causing a learning curve that often leads to delays or worse.

{"backgroundColor":"white","content":"\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeImage--root left\" \u003E\n \u003Cdiv class=\"ShortcodeImage--image-container \"\u003E\n \u003Cimg alt=\"headshot of expert\" class=\"ShortcodeImage--image lazyload\" style=\"width: 60px;\" data-src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/expert-advice-headshots_sfuxjr\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,e_blur:1000,f_auto,h_1600,q_1,w_60\/v1\/expert-advice-headshots_sfuxjr\" data-srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/expert-advice-headshots_sfuxjr 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,f_auto,h_1600,q_auto,w_60\/v1\/expert-advice-headshots_sfuxjr 2x\"\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Ch3 id=\"expert-bradley-poulos\"\u003EBradley Poulos\u003C\/h3\u003E\n\n\u003Cp\u003ELecturer, Entrepreneurship and Strategy, Ryerson University\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeToggle--root ShortcodeToggle--article \" id=\u003E\n \u003Cbutton class=\"ShortcodeToggle--toggle\" onclick=\"this.parentNode.classList.toggle('ShortcodeToggle--open');\"\u003E\u003Cp class=\"ShortcodeToggle--label\"\u003ESee their advice\u003C\/p\u003E\u003C\/button\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents-wrapper\"\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents\"\u003E\n \u003C\/p\u003E\n\n\u003Ch4\u003EWhat are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?\u003C\/h4\u003E\n\n\u003Cp\u003EMost entrepreneurs have very little or no network in the financial investment community and have to build one from scratch. They also lack a deep understanding of how the startup funding world operates, or what appeals to investors, causing a learning curve that often leads to delays or worse.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeAlign--root ShortcodeAlign--horizontal-center\"\u003E\n \u003Cdiv class=\"ShortcodeAlign--container\"\u003E \n \u003Cspan\u003E\u003Ca class=\"ShortcodeLink--root Button--root Button--primary Button--auto-width\" title=\"Back to all experts\" href=\"#expertadvice\"\u003EBack to all experts\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n","padding":"double"}
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Joseph R. Stasio Jr.

Associate Professor, Department of Marketing, Girard School of Business, Merrimack College

What are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?

The biggest challenge facing entrepreneurs when seeking funding for their startups is determining how much money they really need. Several factors play a role in this matter. Is this venture a small business where the needs are rather nominal, or is it a high-technology one where large sums of money are required in different stages for research and development and then testing? Investors always want to know two things: When will we get our money, and what will be the expected return on our investment? All sources of capital expect that entrepreneurs have made some investment in their venture besides sweat equity. This is why online sites like GoFundMe are popular for small businesses. They do not require any upfront investment from the founders. So, entrepreneurs really need to understand the financial and economic circumstances of their startups before seeking funding.

What advice do you have for entrepreneurs to keep their personal funds separate from business expenses?

All startup financials should be kept separate from the founders of the organization. Risk is the most important reason. There are many pitfalls that can affect a company’s well-being and market performance. Some are controllable, but many are not. Insurance is designed to address many of them. If personal finances are separate from the business, the personal financial risks can be greatly mitigated to prevent personal downfalls. If they are comingled, it could spell disaster for them. It also makes accounting and tax preparation much neater.

How would you expect the demand for business travel to change in the next two years?

Given the continuing advancement in electronic meetings (Zoom, WhatsApp, etc.) and because of the pandemic and all the uncertainty it brings, the impact on business travel will be a mixed one at best but overall will continue to shrink. The exception to this is conferences and trade shows where people need to interact. There will always be those conditions where people need face-to-face interaction, but overall, the trend will be negative over the next two years.

{"backgroundColor":"white","content":"\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeImage--root left\" \u003E\n \u003Cdiv class=\"ShortcodeImage--image-container \"\u003E\n \u003Cimg alt=\"headshot of expert\" class=\"ShortcodeImage--image lazyload\" style=\"width: 60px;\" data-src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/joseph-stasio_r6lwhd\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,e_blur:1000,f_auto,h_1600,q_1,w_60\/v1\/joseph-stasio_r6lwhd\" data-srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/joseph-stasio_r6lwhd 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,f_auto,h_1600,q_auto,w_60\/v1\/joseph-stasio_r6lwhd 2x\"\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Ch3 id=\"expert-joseph-stasio\"\u003EJoseph R. Stasio Jr.\u003C\/h3\u003E\n\n\u003Cp\u003EAssociate Professor, Department of Marketing, Girard School of Business, Merrimack College\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeToggle--root ShortcodeToggle--article \" id=\u003E\n \u003Cbutton class=\"ShortcodeToggle--toggle\" onclick=\"this.parentNode.classList.toggle('ShortcodeToggle--open');\"\u003E\u003Cp class=\"ShortcodeToggle--label\"\u003ESee their advice\u003C\/p\u003E\u003C\/button\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents-wrapper\"\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents\"\u003E\n \u003C\/p\u003E\n\n\u003Ch4\u003EWhat are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?\u003C\/h4\u003E\n\n\u003Cp\u003EThe biggest challenge facing entrepreneurs when seeking funding for their startups is determining how much money they really need. Several factors play a role in this matter. Is this venture a small business where the needs are rather nominal, or is it a high-technology one where large sums of money are required in different stages for research and development and then testing? \nInvestors always want to know two things: When will we get our money, and what will be the expected return on our investment? All sources of capital expect that entrepreneurs have made some investment in their venture besides sweat equity. This is why online sites like GoFundMe are popular for small businesses. They do not require any upfront investment from the founders. So, entrepreneurs really need to understand the financial and economic circumstances of their startups before seeking funding.\u003C\/p\u003E\n\n\u003Ch4\u003EWhat advice do you have for entrepreneurs to keep their personal funds separate from business expenses?\u003C\/h4\u003E\n\n\u003Cp\u003EAll startup financials should be kept separate from the founders of the organization. Risk is the most important reason. There are many pitfalls that can affect a company\u2019s well-being and market performance. Some are controllable, but many are not. Insurance is designed to address many of them. If personal finances are separate from the business, the personal financial risks can be greatly mitigated to prevent personal downfalls. If they are comingled, it could spell disaster for them. It also makes accounting and tax preparation much neater.\u003C\/p\u003E\n\n\u003Ch4\u003EHow would you expect the demand for business travel to change in the next two years?\u003C\/h4\u003E\n\n\u003Cp\u003EGiven the continuing advancement in electronic meetings (Zoom, WhatsApp, etc.) and because of the pandemic and all the uncertainty it brings, the impact on business travel will be a mixed one at best but overall will continue to shrink. The exception to this is conferences and trade shows where people need to interact. There will always be those conditions where people need face-to-face interaction, but overall, the trend will be negative over the next two years.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeAlign--root ShortcodeAlign--horizontal-center\"\u003E\n \u003Cdiv class=\"ShortcodeAlign--container\"\u003E \n \u003Cspan\u003E\u003Ca class=\"ShortcodeLink--root Button--root Button--primary Button--auto-width\" title=\"Back to all experts\" href=\"#expertadvice\"\u003EBack to all experts\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n","padding":"double"}
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Marc Compeau

Professor of Practice, Innovation and Entrepreneurship, Clarkson University

What are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?

To qualify for traditional financing, small businesses used to be able to rely on the "three Cs," which are credit, collateral and character. It was common to walk into a bank and sit down with a friend you knew from high school, run a credit report, offer assets as collateral and off you went. As banks today have become a bit more corporate in their approach to lending, the face-to-face is really hard to make happen, even in smaller communities. Today it's really about "two Cs," which are credit and collateral. Banks lend to low-risk businesses, and that's really tough for startups, as most are higher risk by the nature of the early stage.

Today it is a must to find lending partners, local government-backed programs incentivized to lend to riskier startups, SBA guarantees, etc. The challenge then becomes that all of your assets are locked up — if cash flow becomes a later concern, your hands are pretty tied, and creativity will become the critical strategy.

What advice do you have for entrepreneurs to keep their personal funds separate from business expenses?

I see this as one of the most common reasons for small business failure. Think of the business as a completely separate entity. Name it. Name it after your favorite grandparent. Would you steal from your grandma? Putting yourself on the payroll definitely helps. If you are too early for payroll, scheduling regular draws as part of your expense planning might help. Early-stage startups simply cannot rely on the business to support personal expenses. The luxury of that comes after a bit of sweat equity — the carrot all entrepreneurs chase.

How would you expect the demand for business travel to change in the next two years?

Again, my focus is on Main Street, USA. These entrepreneurs aren't traveling; they are unlocking the doors in the morning and locking up at night.

{"backgroundColor":"white","content":"\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeImage--root left\" \u003E\n \u003Cdiv class=\"ShortcodeImage--image-container \"\u003E\n \u003Cimg alt=\"headshot of expert\" class=\"ShortcodeImage--image lazyload\" style=\"width: 60px;\" data-src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/expert-advice-headshots_sfuxjr\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,e_blur:1000,f_auto,h_1600,q_1,w_60\/v1\/expert-advice-headshots_sfuxjr\" data-srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/expert-advice-headshots_sfuxjr 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,f_auto,h_1600,q_auto,w_60\/v1\/expert-advice-headshots_sfuxjr 2x\"\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Ch3 id=\"expert-marc-compeau\"\u003EMarc Compeau\u003C\/h3\u003E\n\n\u003Cp\u003EProfessor of Practice,\u00a0Innovation and Entrepreneurship, Clarkson University\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeToggle--root ShortcodeToggle--article \" id=\u003E\n \u003Cbutton class=\"ShortcodeToggle--toggle\" onclick=\"this.parentNode.classList.toggle('ShortcodeToggle--open');\"\u003E\u003Cp class=\"ShortcodeToggle--label\"\u003ESee their advice\u003C\/p\u003E\u003C\/button\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents-wrapper\"\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents\"\u003E\n \u003C\/p\u003E\n\n\u003Ch4\u003EWhat are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?\u003C\/h4\u003E\n\n\u003Cp\u003ETo qualify for traditional financing, small businesses used to be able to rely on the \"three Cs,\" which are credit, collateral and character. It was common to walk into a bank and sit down with a friend you knew from high school, run a credit report, offer assets as collateral and off you went. As banks today have become a bit more corporate in their approach to lending, the face-to-face is really hard to make happen, even in smaller communities. Today it's really about \"two Cs,\" which are credit and collateral. Banks lend to low-risk businesses, and that's really tough for startups, as most are higher risk by the nature of the early stage.\u003C\/p\u003E\n\n\u003Cp\u003EToday it is a must to find lending partners, local government-backed programs incentivized to lend to riskier startups, SBA guarantees, etc. The challenge then becomes that all of your assets are locked up \u2014 if cash flow becomes a later concern, your hands are pretty tied, and creativity will become the critical strategy.\u003C\/p\u003E\n\n\u003Ch4\u003EWhat advice do you have for entrepreneurs to keep their personal funds separate from business expenses?\u003C\/h4\u003E\n\n\u003Cp\u003EI see this as one of the most common reasons for small business failure. Think of the business as a completely separate entity. Name it. Name it after your favorite grandparent. Would you steal from your grandma? Putting yourself on the payroll definitely helps. If you are too early for payroll, scheduling regular draws as part of your expense planning might help. Early-stage startups simply cannot rely on the business to support personal expenses. The luxury of that comes after a bit of sweat equity \u2014 the carrot all entrepreneurs chase.\u003C\/p\u003E\n\n\u003Ch4\u003EHow would you expect the demand for business travel to change in the next two years?\u003C\/h4\u003E\n\n\u003Cp\u003EAgain, my focus is on Main Street, USA. These entrepreneurs aren't traveling; they are unlocking the doors in the morning and locking up at night.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeAlign--root ShortcodeAlign--horizontal-center\"\u003E\n \u003Cdiv class=\"ShortcodeAlign--container\"\u003E \n \u003Cspan\u003E\u003Ca class=\"ShortcodeLink--root Button--root Button--primary Button--auto-width\" title=\"Back to all experts\" href=\"#expertadvice\"\u003EBack to all experts\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n","padding":"double"}
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Sean Wise, Ph.D.

Associate Professor, Entrepreneurship & Strategy, Ryerson University

What are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?

Because the cost to launch and test an opportunity has dropped to a few hundred dollars (where it was millions during the dot.com boom), investors expect founders to have traction before they come and pitch. Having an idea is no longer enough. Today investors want true proof of concept, which I define as "turning on the light and having someone pay you to read under it." The light simply working is no longer enough to interest funders. Yet many founders believe that they must obtain funding prior to testing the opportunity. And that hasn't been the case for more than a decade.

What advice do you have for entrepreneurs to keep their personal funds separate from business expenses?

Being a founder of a startup can be all-consuming; you need to hedge your bets. You should make sure that while you are "all in," you aren't being dumb by putting all your eggs in one basket. I recommend that entrepreneurs open a business bank account and use a business credit card for all purchases. That will make bookkeeping really easy when it comes to tax time.

How would you expect the demand for business travel to change in the next two years?

I have no crystal ball, but I think the pandemic has made a lot more people think about working from home full time. Travel has become a luxury few firms want to invest in. In my humble opinion, I don't see travel returning to pre-COVID-19 levels for a long time. Firms will continue to use digital technologies to replace in-person meetings — not only for safety reasons but also for quality-of-life reasons and cost.

{"backgroundColor":"white","content":"\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeImage--root left\" \u003E\n \u003Cdiv class=\"ShortcodeImage--image-container \"\u003E\n \u003Cimg alt=\"headshot of expert\" class=\"ShortcodeImage--image lazyload\" style=\"width: 60px;\" data-src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/sean-wise_bofwya\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,e_blur:1000,f_auto,h_1600,q_1,w_60\/v1\/sean-wise_bofwya\" data-srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/sean-wise_bofwya 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,f_auto,h_1600,q_auto,w_60\/v1\/sean-wise_bofwya 2x\"\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Ch3 id=\"expert-sean-wise\"\u003ESean Wise, Ph.D.\u003C\/h3\u003E\n\n\u003Cp\u003EAssociate Professor, Entrepreneurship & Strategy, Ryerson University\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeToggle--root ShortcodeToggle--article \" id=\u003E\n \u003Cbutton class=\"ShortcodeToggle--toggle\" onclick=\"this.parentNode.classList.toggle('ShortcodeToggle--open');\"\u003E\u003Cp class=\"ShortcodeToggle--label\"\u003ESee their advice\u003C\/p\u003E\u003C\/button\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents-wrapper\"\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents\"\u003E\n \u003C\/p\u003E\n\n\u003Ch4\u003EWhat are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?\u003C\/h4\u003E\n\n\u003Cp\u003EBecause the cost to launch and test an opportunity has dropped to a few hundred dollars (where it was millions during the dot.com boom), investors expect founders to have traction \u003Cem\u003Ebefore\u003C\/em\u003E they come and pitch. Having an idea is no longer enough. Today investors want true proof of concept, which I define as \"turning on the light and having someone pay you to read under it.\" The light simply working is no longer enough to interest funders. Yet many founders believe that they must obtain funding prior to testing the opportunity. And that hasn't been the case for more than a decade.\u003C\/p\u003E\n\n\u003Ch4\u003EWhat advice do you have for entrepreneurs to keep their personal funds separate from business expenses?\u003C\/h4\u003E\n\n\u003Cp\u003EBeing a founder of a startup can be all-consuming; you need to hedge your bets. You should make sure that while you are \"all in,\" you aren't being dumb by putting all your eggs in one basket. I recommend that entrepreneurs open a business bank account and use a business credit card for all purchases. That will make bookkeeping really easy when it comes to tax time.\u003C\/p\u003E\n\n\u003Ch4\u003EHow would you expect the demand for business travel to change in the next two years?\u003C\/h4\u003E\n\n\u003Cp\u003EI have no crystal ball, but I think the pandemic has made a lot more people think about working from home full time. Travel has become a luxury few firms want to invest in. In my humble opinion, I don't see travel returning to pre-COVID-19 levels for a long time. Firms will continue to use digital technologies to replace in-person meetings \u2014 not only for safety reasons but also for quality-of-life reasons and cost.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeAlign--root ShortcodeAlign--horizontal-center\"\u003E\n \u003Cdiv class=\"ShortcodeAlign--container\"\u003E \n \u003Cspan\u003E\u003Ca class=\"ShortcodeLink--root Button--root Button--primary Button--auto-width\" title=\"Back to all experts\" href=\"#expertadvice\"\u003EBack to all experts\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n","padding":"double"}
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John Mullane

Professor, Strategic Management and Entrepreneurship, Middle Tennessee State University

What are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?

The biggest challenge for first-time entrepreneurs is newness. If they don’t have any startup experience or particular, notable expertise in the area of their business, it will be difficult to get taken seriously. Many investors list the skills and abilities of the entrepreneur as their No. 1 consideration, and the potential of the idea comes second. Thus, in the absence of experience, an entrepreneur is playing from behind right away. The lack of experience usually also means that the entrepreneur is lacking in contacts. Who you know is indeed as important as what you know when it comes to funding a startup.

For an experienced entrepreneur, the biggest challenge is keeping equity. Investors will want as much as they can get, and it’s your job to hang on to as much as you can. It's a bit of a tug-of-war, but usually it’s better to grow slowly through cash flow while keeping control of your company than it is to pursue fast growth while only holding a minority stake.

What advice do you have for entrepreneurs to keep their personal funds separate from business expenses?

Do it! Before you open for business, you should have a business account that is separate from your personal accounts. Get a certified public accountant involved; it’s worth the money!

In your opinion, should businesses keep a close eye on their credit scores when providing business credit cards to their employees? Why or why not?

Yes, of course. Your business’s credit score will affect your ability to get future credit. Even if you think you won’t need credit in the future, you don’t know that. Better to have a good credit rating and not need it than the alternative. Put limits on your business cards and watch over them carefully. Whenever possible, pay off the balance every month. If you must carry a balance, watch those interest rates. They will eat away at your profits.

How would you expect the demand for business travel to change in the next two years?

A: While Zoom has taught us that not all meetings need to be in person, it’s also taught us that many are better in person. While not based on any research, I expect the demand for business travel to rebound to pre-pandemic levels in the next two years.

{"backgroundColor":"white","content":"\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeImage--root left\" \u003E\n \u003Cdiv class=\"ShortcodeImage--image-container \"\u003E\n \u003Cimg alt=\"headshot of expert\" class=\"ShortcodeImage--image lazyload\" style=\"width: 60px;\" data-src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/john-mulane_smouas\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,e_blur:1000,f_auto,h_1600,q_1,w_60\/v1\/john-mulane_smouas\" data-srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/john-mulane_smouas 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,f_auto,h_1600,q_auto,w_60\/v1\/john-mulane_smouas 2x\"\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Ch3 id=\"expert-john-mullane\"\u003EJohn Mullane\u003C\/h3\u003E\n\n\u003Cp\u003EProfessor, Strategic Management and Entrepreneurship, Middle Tennessee State University\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeToggle--root ShortcodeToggle--article \" id=\u003E\n \u003Cbutton class=\"ShortcodeToggle--toggle\" onclick=\"this.parentNode.classList.toggle('ShortcodeToggle--open');\"\u003E\u003Cp class=\"ShortcodeToggle--label\"\u003ESee their advice\u003C\/p\u003E\u003C\/button\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents-wrapper\"\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents\"\u003E\n \u003C\/p\u003E\n\n\u003Ch4\u003EWhat are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?\u003C\/h4\u003E\n\n\u003Cp\u003EThe biggest challenge for first-time entrepreneurs is newness. If they don\u2019t have any startup experience or particular, notable expertise in the area of their business, it will be difficult to get taken seriously. Many investors list the skills and abilities of the entrepreneur as their No. 1 consideration, and the potential of the idea comes second. Thus, in the absence of experience, an entrepreneur is playing from behind right away. The lack of experience usually also means that the entrepreneur is lacking in contacts. Who you know is indeed as important as what you know when it comes to funding a startup.\u003C\/p\u003E\n\n\u003Cp\u003EFor an experienced entrepreneur, the biggest challenge is keeping equity. Investors will want as much as they can get, and it\u2019s your job to hang on to as much as you can. It's a bit of a tug-of-war, but usually it\u2019s better to grow slowly through cash flow while keeping control of your company than it is to pursue fast growth while only holding a minority stake.\u003C\/p\u003E\n\n\u003Ch4\u003EWhat advice do you have for entrepreneurs to keep their personal funds separate from business expenses?\u003C\/h4\u003E\n\n\u003Cp\u003EDo it! Before you open for business, you should have a business account that is separate from your personal accounts. Get a certified public accountant involved; it\u2019s worth the money!\u003C\/p\u003E\n\n\u003Ch4\u003EIn your opinion, should businesses keep a close eye on their credit scores when providing business credit cards to their employees? Why or why not?\u003C\/h4\u003E\n\n\u003Cp\u003EYes, of course. Your business\u2019s credit score will affect your ability to get future credit. Even if you think you won\u2019t need credit in the future, you don\u2019t know that. Better to have a good credit rating and not need it than the alternative. Put limits on your business cards and watch over them carefully. Whenever possible, pay off the balance every month. If you must carry a balance, watch those interest rates. They will eat away at your profits.\u003C\/p\u003E\n\n\u003Ch4\u003EHow would you expect the demand for business travel to change in the next two years?\u003C\/h4\u003E\n\n\u003Cp\u003EA: While Zoom has taught us that not all meetings need to be in person, it\u2019s also taught us that many are better in person. While not based on any research, I expect the demand for business travel to rebound to pre-pandemic levels in the next two years.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeAlign--root ShortcodeAlign--horizontal-center\"\u003E\n \u003Cdiv class=\"ShortcodeAlign--container\"\u003E \n \u003Cspan\u003E\u003Ca class=\"ShortcodeLink--root Button--root Button--primary Button--auto-width\" title=\"Back to all experts\" href=\"#expertadvice\"\u003EBack to all experts\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n","padding":"double"}
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Latisha Nixon-Jones

Assistant Professor of Law, Mercer University

What are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?

The biggest two challenges for entrepreneurs are having the correct legal structure and documents and having sufficient business credit. Most entrepreneurs lack the knowledge of the correct ways to establish credit and access to funding. As a result, they lack the ability to hire attorneys to create appropriate legal structures for their business.

What advice do you have for entrepreneurs to keep their personal funds separate from business expenses?

Entrepreneurs should have two separate banking accounts as soon as they start a business. A personal account to pay themselves a salary and a business account to pay the expenses of the business.

In your opinion, should businesses keep a close eye on their credit scores when providing business credit cards to their employees? Why or why not?

Businesses have a responsibility to monitor their employees because employees can act as agents in the business. An agent is someone that can create liabilities for the company including incurring debt, loans and credit. Businesses should limit access to credit cards to employees that are essential to their employment.

How would you expect the demand for business travel to change in the next two years?

Business travel will experience two new trends: 1) companies are going to continue to use virtual means to meet for local meetings and 2) travel for distance needs will return to normal or increased levels as vaccination rates increase. Virtual technology, including Zoom, has allowed companies to meet the needs of the business while reducing costs and increasing employee efficiency. The increased savings will allow businesses to invest in additional long-distance travel.

{"backgroundColor":"white","content":"\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeImage--root left\" \u003E\n \u003Cdiv class=\"ShortcodeImage--image-container \"\u003E\n \u003Cimg alt=\"headshot of expert\" class=\"ShortcodeImage--image lazyload\" style=\"width: 60px;\" data-src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/expert-advice-headshots_sfuxjr\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,e_blur:1000,f_auto,h_1600,q_1,w_60\/v1\/expert-advice-headshots_sfuxjr\" data-srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/expert-advice-headshots_sfuxjr 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,f_auto,h_1600,q_auto,w_60\/v1\/expert-advice-headshots_sfuxjr 2x\"\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Ch3 id=\"expert-latisha-nixon-jones\"\u003ELatisha Nixon-Jones\u003C\/h3\u003E\n\n\u003Cp\u003EAssistant Professor of Law, Mercer University\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeToggle--root ShortcodeToggle--article \" id=\u003E\n \u003Cbutton class=\"ShortcodeToggle--toggle\" onclick=\"this.parentNode.classList.toggle('ShortcodeToggle--open');\"\u003E\u003Cp class=\"ShortcodeToggle--label\"\u003ESee their advice\u003C\/p\u003E\u003C\/button\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents-wrapper\"\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents\"\u003E\n \u003C\/p\u003E\n\n\u003Ch4\u003EWhat are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?\u003C\/h4\u003E\n\n\u003Cp\u003EThe biggest two challenges for entrepreneurs are having the correct legal structure and documents and having sufficient business credit. Most entrepreneurs lack the knowledge of the correct ways to establish credit and access to funding. As a result, they lack the ability to hire attorneys to create appropriate legal structures for their business.\u003C\/p\u003E\n\n\u003Ch4\u003EWhat advice do you have for entrepreneurs to keep their personal funds separate from business expenses?\u003C\/h4\u003E\n\n\u003Cp\u003EEntrepreneurs should have two separate banking accounts as soon as they start a business. A personal account to pay themselves a salary and a business account to pay the expenses of the business.\u003C\/p\u003E\n\n\u003Ch4\u003EIn your opinion, should businesses keep a close eye on their credit scores when providing business credit cards to their employees? Why or why not?\u003C\/h4\u003E\n\n\u003Cp\u003EBusinesses have a responsibility to monitor their employees because employees can act as agents in the business. An agent is someone that can create liabilities for the company including incurring debt, loans and credit. Businesses should limit access to credit cards to employees that are essential to their employment.\u003C\/p\u003E\n\n\u003Ch4\u003EHow would you expect the demand for business travel to change in the next two years?\u003C\/h4\u003E\n\n\u003Cp\u003EBusiness travel will experience two new trends: 1) companies are going to continue to use virtual means to meet for local meetings and 2) travel for distance needs will return to normal or increased levels as vaccination rates increase. Virtual technology, including Zoom, has allowed companies to meet the needs of the business while reducing costs and increasing employee efficiency. The increased savings will allow businesses to invest in additional long-distance travel.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeAlign--root ShortcodeAlign--horizontal-center\"\u003E\n \u003Cdiv class=\"ShortcodeAlign--container\"\u003E \n \u003Cspan\u003E\u003Ca class=\"ShortcodeLink--root Button--root Button--primary Button--auto-width\" title=\"Back to all experts\" href=\"#expertadvice\"\u003EBack to all experts\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n","padding":"double"}
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Edward E. Ackerley

Adjunct Instructor of Marketing, Communication and Film/Television, Eller College of Management, University of Arizona

What advice do you have for entrepreneurs to keep their personal funds separate from business expenses?

One of the big mistakes entrepreneurs make is to comingle their private funds with business. If you are going to "start a business," you need to treat it as such. You should apply for an employer identification number (EIN) with the IRS, incorporate if you wish to have a corporation and register with your state’s corporate commission, and go to a bank (in person or online) and set up a business account. You should have a business plan to guide you through the process (the S.C.O.R.E. program is a good place to start), and you should institute a marketing plan so that you can promote your new business (hire an advertising professional to assist).

It is OK to give "seed money" to your business by making a temporary investment in the company. However, your business plan should include enough cash flow to pay off the loan within the first year. Additionally, you should keep your bookkeeping records separate from your personal records. If you are handling your own bookkeeping and accounting, make sure you use an accepted bookkeeping software package. If you can (and it is recommended), hire a professional bookkeeping firm or accountant to assist you with your finances. This will help you get monthly reports, give you access to cash flow and help when it comes time to file taxes.

It is tempting to comingle the personal and business funds because "what the heck, it’s just me." But the IRS will want to make the distinction between your personal income and that generated by the company. You should treat your new company as just that — a company. As if someone else owned it and that you were accountable to them for making sure the revenues are recorded and the expenses are documented every day, week, month and annually. This documentation will assist at the end of the year when taxes are due. If you are ever audited by the IRS, check with an IRS attorney, accounting firm or specialist that can help you navigate the waters of the audit. Having good records including for your loan and repayment will save you much time and grief in the future.

From time to time it may be necessary to loan the company additional money, and this should be recorded with every intent to pay back. You should write a contract with yourself and make a repayment schedule that the company can afford and stick to it. You may have to "not pay yourself" because you have other bills that need to be paid. In this case, you should again make documentation of this and record the amount due for your pay and try to recoup these funds when cash flow allows.

If you purchase something on behalf of your new company with your personal debit, credit card or cash, make meticulous notes and place them with the receipt when the expense is recorded so that when you are paid back by the company, that expense can be notated. This is especially the case when you pay for entertainment and dining — make sure that you record the person(s) you dined with, their proper spelling of names, day, date and time, and make a note of the purpose of the business discussion. It would seem you could just "remember" these details, but even a week or two later it is difficult to remember exactly why you had a meal with someone, what you talked about and why it could be considered business. So be meticulous and record your receipts every day (at least weekly) to ensure that you have the proper records.

Loaning yourself money from your personal accounts to your business accounts is acceptable, but make sure you record the transaction in as much detail as you can, include a payback schedule and adhere to the contract. If you must miss a payment or skip several payments, make a clear and concise record on the agreement to amend the agreed-to contract so that you stick to it and make the payback as soon as you are able. It is good to be able to have the resources to help the company, but you should look at it like you are loaning a good friend money rather than yourself. How would you want to be paid, when, and how much would you be willing to loan?

If the company you create is not a moneymaker, and if you go for some time not making any profit and you continue to fund the operation, it will not be long before your dream company becomes your nightmare and you lose not only the company, but all the personal money you contributed. Be loan-wise, be payback-focused and keep your eye on making a profit so you do not have to loan yourself money.

{"backgroundColor":"white","content":"\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeImage--root left\" \u003E\n \u003Cdiv class=\"ShortcodeImage--image-container \"\u003E\n \u003Cimg alt=\"headshot of expert\" class=\"ShortcodeImage--image lazyload\" style=\"width: 60px;\" data-src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/expert-advice-headshots_sfuxjr\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,e_blur:1000,f_auto,h_1600,q_1,w_60\/v1\/expert-advice-headshots_sfuxjr\" data-srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/expert-advice-headshots_sfuxjr 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,f_auto,h_1600,q_auto,w_60\/v1\/expert-advice-headshots_sfuxjr 2x\"\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Ch3 id=\"expert-edward-ackerley\"\u003EEdward E. Ackerley\u003C\/h3\u003E\n\n\u003Cp\u003EAdjunct Instructor of Marketing, Communication and Film\/Television, Eller College of Management, University of Arizona\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeToggle--root ShortcodeToggle--article \" id=\u003E\n \u003Cbutton class=\"ShortcodeToggle--toggle\" onclick=\"this.parentNode.classList.toggle('ShortcodeToggle--open');\"\u003E\u003Cp class=\"ShortcodeToggle--label\"\u003ESee their advice\u003C\/p\u003E\u003C\/button\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents-wrapper\"\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents\"\u003E\n \u003C\/p\u003E\n\n\u003Ch4\u003EWhat advice do you have for entrepreneurs to keep their personal funds separate from business expenses?\u003C\/h4\u003E\n\n\u003Cp\u003EOne of the big mistakes entrepreneurs make is to comingle their private funds with business. If you are going to \"start a business,\" you need to treat it as such. You should apply for an employer identification number (EIN) with the IRS, incorporate if you wish to have a corporation and register with your state\u2019s corporate commission, and go to a bank (in person or online) and set up a business account. You should have a business plan to guide you through the process (the S.C.O.R.E. program is a good place to start), and you should institute a marketing plan so that you can promote your new business (hire an advertising professional to assist).\u003C\/p\u003E\n\n\u003Cp\u003EIt is OK to give \"seed money\" to your business by making a temporary investment in the company. However, your business plan should include enough cash flow to pay off the loan within the first year. Additionally, you should keep your bookkeeping records separate from your personal records. If you are handling your own bookkeeping and accounting, make sure you use an accepted bookkeeping software package. If you can (and it is recommended), hire a professional bookkeeping firm or accountant to assist you with your finances. This will help you get monthly reports, give you access to cash flow and help when it comes time to file taxes.\u003C\/p\u003E\n\n\u003Cp\u003EIt is tempting to comingle the personal and business funds because \"what the heck, it\u2019s just me.\" But the IRS will want to make the distinction between your personal income and that generated by the company. You should treat your new company as just that \u2014 a company. As if someone else owned it and that you were accountable to them for making sure the revenues are recorded and the expenses are documented every day, week, month and annually. This documentation will assist at the end of the year when taxes are due. If you are ever audited by the IRS, check with an IRS attorney, accounting firm or specialist that can help you navigate the waters of the audit. Having good records including for your loan and repayment will save you much time and grief in the future.\u003C\/p\u003E\n\n\u003Cp\u003EFrom time to time it may be necessary to loan the company additional money, and this should be recorded with every intent to pay back. You should write a contract with yourself and make a repayment schedule that the company can afford and stick to it. You may have to \"not pay yourself\" because you have other bills that need to be paid. In this case, you should again make documentation of this and record the amount due for your pay and try to recoup these funds when cash flow allows.\u003C\/p\u003E\n\n\u003Cp\u003EIf you purchase something on behalf of your new company with your personal debit, credit card or cash, make meticulous notes and place them with the receipt when the expense is recorded so that when you are paid back by the company, that expense can be notated. This is especially the case when you pay for entertainment and dining \u2014 make sure that you record the person(s) you dined with, their proper spelling of names, day, date and time, and make a note of the purpose of the business discussion. It would seem you could just \"remember\" these details, but even a week or two later it is difficult to remember exactly why you had a meal with someone, what you talked about and why it could be considered business. So be meticulous and record your receipts every day (at least weekly) to ensure that you have the proper records.\u003C\/p\u003E\n\n\u003Cp\u003ELoaning yourself money from your personal accounts to your business accounts is acceptable, but make sure you record the transaction in as much detail as you can, include a payback schedule and adhere to the contract. If you must miss a payment or skip several payments, make a clear and concise record on the agreement to amend the agreed-to contract so that you stick to it and make the payback as soon as you are able. It is good to be able to have the resources to help the company, but you should look at it like you are loaning a good friend money rather than yourself. How would you want to be paid, when, and how much would you be willing to loan?\u003C\/p\u003E\n\n\u003Cp\u003EIf the company you create is not a moneymaker, and if you go for some time not making any profit and you continue to fund the operation, it will not be long before your dream company becomes your nightmare and you lose not only the company, but all the personal money you contributed. Be loan-wise, be payback-focused and keep your eye on making a profit so you do not have to loan yourself money.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeAlign--root ShortcodeAlign--horizontal-center\"\u003E\n \u003Cdiv class=\"ShortcodeAlign--container\"\u003E \n \u003Cspan\u003E\u003Ca class=\"ShortcodeLink--root Button--root Button--primary Button--auto-width\" title=\"Back to all experts\" href=\"#expertadvice\"\u003EBack to all experts\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n","padding":"double"}
headshot of expert

Joe Roberts, Ph.D.

Director, Center for Innovation & Professional Development, Webster University

What are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?

There are several challenges entrepreneurs must overcome to obtain startup funding.

First, some context. There are always investors or lenders willing to invest in a good idea that can solve people’s problems or improve the quality of life for users of a product or service provided by a company. However, these investors or lenders are seeking to generate revenues and a reasonable rate of return for their investments or loans.

On the other hand, there are entrepreneurs with reasonably good ideas seeking a loan or an investment. The challenge is bringing these two sides together and finding common ground. The difficulty lies in finding this common ground. The list below identifies some of the biggest challenges/barriers to uncovering this common ground.

  1. Establishing proof of concept to demonstrate that the product or service is workable and developing a functioning prototype.
  2. Convincing funding entities that the startup/entrepreneur can produce and deliver products or services to the marketplace.
  3. Determining the true costs involved from ideation to production and distribution of a product or service and going to market to acquire customers.
  4. The other challenge is creditworthiness. In most cases, entrepreneurs must demonstrate that they are financially and fiscally responsible by obtaining and maintaining a high FICO Score.
  5. Demonstrating that the entrepreneur has assembled an exceptional management team to work through the various rules, regulations and laws required for a successful launch.
  6. Assembling a board of directors, advisors and mentors to guide the start-up process is also a challenge that entrepreneurs must overcome.

What advice do you have for entrepreneurs to keep their personal funds separate from business expenses?

Develop a system that works for you. This can be a set of inboxes within your email application or in some cases two shoe boxes. It is not important which system you choose to deploy, but that you have a system and you are willing to strictly follow the system. Keep business purchases and expenses separate from personal expenses. Some entrepreneurs have two separate bank accounts, debit cards and credit cards. One for personal use and one for business use. This is a good idea.

Whatever the case may be, get into the habit of identifying personal expenses and business expenses and tracking them. If you do not have a business credit card, try to get one. There are excellent resources available to help you get a business credit card.

Use your personal credit card for personal expenses/purchases and your business credit card for business expenses. For example: Say you are meeting someone to determine which social media campaign you should choose for your company. The money you spend on your campaign is a business expense and so are travel, meals and incidental expenses. You should use your business credit card for these expenses.

You decide to go shopping after this meeting. For personal shopping/expenses such as buying shoes or clothes, use your personal credit card.

In some cases, individuals end up buying personal items using business credit cards. Avoid this bad practice. It is best practice not to mix personal and business expenses.

In your opinion, should businesses keep a close eye on their credit scores when providing business credit cards to their employees? Why or why not?

The short answer is yes. Keep a very close eye on the business and personal credit scores. In most cases, employee business credit cards for small businesses and startups are tied to the entrepreneur/owner’s credit history.

Employee credit cards issued by the business and how these expenses and payments are managed in terms of frequency of payments and balances impact the business and personal credit of business owners. Some employees end up using these cards for personal expenses. This is not OK.

As a matter of policy, companies usually do not allow personal expenses on business-issued credit cards. If there is no such policy for your company, it is recommended that you establish such a policy ASAP. Personal use of business-issued credit cards by employees is problematic and should be avoided.

Example: If an employee is traveling and wants to use the business-issued credit card for meals and Uber and hotel stays, that is fine. It is not OK, however, to go shopping for personal items and use the business credit card to pay for them. Employees should use their personal credit cards for shopping. Managing this practice carefully will help improve credit ratings for business-issued credit cards.

How would you expect the demand for business travel to change in the next two years?

The demand for business travel is expected to pick up over the next two years. Compared to pre-pandemic levels, there are several signs that business travel will be picking up. However, it may not go back up to pre-pandemic levels.

There are several reasons to believe that the demand for business travel may not go back up to pre-pandemic levels. Business meetings using online platforms like Zoom, Webex and similar applications have become normal over the past several months, and the savings achieved by businesses by not traveling in terms of the amount of time, energy and monies spent on local, regional, national and international travel are impacting travel decisions.

Overall business travel will pick up over the next two years. By how much remains to be seen.

{"backgroundColor":"white","content":"\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeImage--root left\" \u003E\n \u003Cdiv class=\"ShortcodeImage--image-container \"\u003E\n \u003Cimg alt=\"headshot of expert\" class=\"ShortcodeImage--image lazyload\" style=\"width: 60px;\" data-src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/expert-advice-headshots_sfuxjr\" src=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,e_blur:1000,f_auto,h_1600,q_1,w_60\/v1\/expert-advice-headshots_sfuxjr\" data-srcset=\"https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/expert-advice-headshots_sfuxjr 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,f_auto,h_1600,q_auto,w_60\/v1\/expert-advice-headshots_sfuxjr 2x\"\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Ch3 id=\"expert-joe-roberts\"\u003EJoe Roberts, Ph.D.\u003C\/h3\u003E\n\n\u003Cp\u003EDirector, Center for Innovation & Professional Development, Webster University\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeToggle--root ShortcodeToggle--article \" id=\u003E\n \u003Cbutton class=\"ShortcodeToggle--toggle\" onclick=\"this.parentNode.classList.toggle('ShortcodeToggle--open');\"\u003E\u003Cp class=\"ShortcodeToggle--label\"\u003ESee their advice\u003C\/p\u003E\u003C\/button\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents-wrapper\"\u003E\n \u003Cdiv class=\"ShortcodeToggle--contents\"\u003E\n \u003C\/p\u003E\n\n\u003Ch4\u003EWhat are the biggest challenges entrepreneurs face when trying to obtain funding for their startup?\u003C\/h4\u003E\n\n\u003Cp\u003EThere are several challenges entrepreneurs must overcome to obtain startup funding.\u003C\/p\u003E\n\n\u003Cp\u003EFirst, some context. \nThere are always investors or lenders willing to invest in a good idea that can solve people\u2019s problems or improve the quality of life for users of a product or service provided by a company. However, these investors or lenders are seeking to generate revenues and a reasonable rate of return for their investments or loans.\u003C\/p\u003E\n\n\u003Cp\u003EOn the other hand, there are entrepreneurs with reasonably good ideas seeking a loan or an investment. The challenge is bringing these two sides together and finding common ground. The difficulty lies in finding this common ground. The list below identifies some of the biggest challenges\/barriers to uncovering this common ground.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\"ShortcodeList--root\"\u003E\n\n \u003Cdiv class=\"ShortcodeList--content ShortcodeList--content-margin\"\u003E\n \u003Cdiv class=\"ShortcodeList--column\"\u003E\n \u003Col class=\"ListOrdered--root\"\u003E\n \u003Cli class=\"ListOrdered--list-item\"\u003EEstablishing proof of concept to demonstrate that the product or service is workable and developing a functioning prototype.\u003C\/li\u003E\n \u003Cli class=\"ListOrdered--list-item\"\u003EConvincing funding entities that the startup\/entrepreneur can produce and deliver products or services to the marketplace.\u003C\/li\u003E\n \u003Cli class=\"ListOrdered--list-item\"\u003EDetermining the true costs involved from ideation to production and distribution of a product or service and going to market to acquire customers.\u003C\/li\u003E\n \u003Cli class=\"ListOrdered--list-item\"\u003EThe other challenge is creditworthiness. In most cases, entrepreneurs must demonstrate that they are financially and fiscally responsible by obtaining and maintaining a high FICO Score.\u003C\/li\u003E\n \u003Cli class=\"ListOrdered--list-item\"\u003EDemonstrating that the entrepreneur has assembled an exceptional management team to work through the various rules, regulations and laws required for a successful launch.\u003C\/li\u003E\n \u003Cli class=\"ListOrdered--list-item\"\u003EAssembling a board of directors, advisors and mentors to guide the start-up process is also a challenge that entrepreneurs must overcome.\u003C\/li\u003E\n \u003C\/ol\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n\u003C\/p\u003E\n\n\u003Ch4\u003EWhat advice do you have for entrepreneurs to keep their personal funds separate from business expenses?\u003C\/h4\u003E\n\n\u003Cp\u003EDevelop a system that works for you. This can be a set of inboxes within your email application or in some cases two shoe boxes. It is not important which system you choose to deploy, but that you have a system and you are willing to strictly follow the system.\nKeep business purchases and expenses separate from personal expenses. Some entrepreneurs have two separate bank accounts, debit cards and credit cards. One for personal use and one for business use. This is a good idea.\u003C\/p\u003E\n\n\u003Cp\u003EWhatever the case may be, get into the habit of identifying personal expenses and business expenses and tracking them. If you do not have a business credit card, try to get one. There are excellent resources available to help you get a business credit card.\u003C\/p\u003E\n\n\u003Cp\u003EUse your personal credit card for personal expenses\/purchases and your business credit card for business expenses. For example: Say you are meeting someone to determine which social media campaign you should choose for your company. The money you spend on your campaign is a business expense and so are travel, meals and incidental expenses. You should use your business credit card for these expenses.\u003C\/p\u003E\n\n\u003Cp\u003EYou decide to go shopping after this meeting. For personal shopping\/expenses such as buying shoes or clothes, use your personal credit card.\u003C\/p\u003E\n\n\u003Cp\u003EIn some cases, individuals end up buying personal items using business credit cards. Avoid this bad practice. It is best practice not to mix personal and business expenses.\u003C\/p\u003E\n\n\u003Ch4\u003EIn your opinion, should businesses keep a close eye on their credit scores when providing business credit cards to their employees? Why or why not?\u003C\/h4\u003E\n\n\u003Cp\u003EThe short answer is yes. Keep a very close eye on the business and personal credit scores. In most cases, employee business credit cards for small businesses and startups are tied to the entrepreneur\/owner\u2019s credit history.\u003C\/p\u003E\n\n\u003Cp\u003EEmployee credit cards issued by the business and how these expenses and payments are managed in terms of frequency of payments and balances impact the business and personal credit of business owners. Some employees end up using these cards for personal expenses. This is not OK.\u003C\/p\u003E\n\n\u003Cp\u003EAs a matter of policy, companies usually do not allow personal expenses on business-issued credit cards. If there is no such policy for your company, it is recommended that you establish such a policy ASAP. Personal use of business-issued credit cards by employees is problematic and should be avoided.\u003C\/p\u003E\n\n\u003Cp\u003EExample: If an employee is traveling and wants to use the business-issued credit card for meals and Uber and hotel stays, that is fine. It is not OK, however, to go shopping for personal items and use the business credit card to pay for them. Employees should use their personal credit cards for shopping. Managing this practice carefully will help improve credit ratings for business-issued credit cards.\u003C\/p\u003E\n\n\u003Ch4\u003EHow would you expect the demand for business travel to change in the next two years?\u003C\/h4\u003E\n\n\u003Cp\u003EThe demand for business travel is expected to pick up over the next two years. Compared to pre-pandemic levels, there are several signs that business travel will be picking up. However, it may not go back up to pre-pandemic levels.\u003C\/p\u003E\n\n\u003Cp\u003EThere are several reasons to believe that the demand for business travel may not go back up to pre-pandemic levels. 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Methodology

To make choosing the right card easier, we've looked at credit cards reviewed on ValuePenguin as well as cards on major issuer sites to compile a list of the best rewards credit cards available right now. Our recommendations are based on the additional value you can earn with the cards — including the rewards value, cost of ownership and value of benefits such as travel and purchase protections, lounge membership and airline companion passes. Our choices are not influenced by our advertisers. Learn more on how we calculate rewards.

The information related to the The Business Platinum Card® from American Express, Brex 30, American Express® Business Gold Card, Capital One® Spark® Classic for Business, American Express Blue Business Cash™ Card, The Blue Business® Plus Credit Card from American Express, The Hilton Honors American Express Business Card, First Progress Platinum Prestige Mastercard® Secured Credit Card and U.S. Bank Business Platinum Card has been independently collected by ValuePenguin and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply to American Express credit card offers. See americanexpress.com for more information.

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

Advertiser Disclosure: The products that appear on this site may be from companies from which ValuePenguin receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). ValuePenguin does not include all financial institutions or all products offered available in the marketplace.

How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin's alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.

Example of how we calculate the rewards rates: When redeemed for travel through Ultimate Rewards, Chase Sapphire Preferred points are worth $0.0125 each. The card awards 2 points on travel and dining and 1 point on everything else. Therefore, we say the card has a 2.5% rewards rate on dining and travel (2 x $0.0125) and a 1.25% rewards rate on everything else (1 x $0.0125).