Business Finance: 4 Ways Business Credit Cards Expand Your Options

March 18, 2022

In business, capital is the sun and rain that helps a company grow. That’s why choosing financial resources to nourish the seeds of your business is one of the most important financial decisions you’ll make, and one that you’ll want to reevaluate over the life of your business as needs grow and change. 

Small business loans are often seen as the foundation of a startup or small business financing plan. But have you considered how a revolving line of credit — also known as a business credit card — can supplement or work in tandem with a traditional loan? Different loans and revolving lines of credit have different strengths and benefits to help nurture your growing business.   

Your banking and financial services should be customized to your company’s particular needs, and it’s worth having a conversation with your banker to discuss the most appropriate funding solutions for you. For starters, though, here are four ways to think about putting a business credit card to work for you — with or without a loan as part of a financing package.  

1. Use credit cards and traditional loans together. Conventional loans are best suited for one-off, bigger-ticket purchases that you’ll pay off over years rather than months. On the other hand, business credit cards are ideal for short-term or monthly expenses because the credit line is truly revolving. You only need to get approved once — and after you’ve paid off the amount you owe, you automatically have access to the same limit again.

2. Consider the credit card as the first step toward getting a loan. If you’re not ready yet for a traditional loan, credit cards offer a relatively low-risk way for your business to build positive credit — something you’ll need in the future if you want to go for the loan option.  

3. Think of the credit card as an insurance policy. A business card can function as a virtual shoebox under your bed, ready money for a rainy day. Even if you don’t use it regularly, knowing you have a reserve supply available for emergencies can deliver peace of mind so that you can focus on other important business decisions.  

4. Double down on rewards points. Rewards programs built into many business and corporate credit cards pay cardholders back in very real ways, and the more you use them, the more you gain. Innovative companies centralize monthly spending on their credit cards, then use the accumulated rewards points to finance employee-of-the-month awards, company retreats, new office equipment and more. What could your business do with an infusion of cash back or rewards points every month? 

These are just a few ideas for using a business or commercial credit card alone or in conjunction with a traditional loan to help fund your business. To explore which credit card program is right for you, contact your Western Alliance Bank relationship manager or find out more about what our bank can offer businesses like yours.