Business credit card expenses
Business credit cards are a convenient way for employees and directors/owners of the company to pay for business expenses. Business owners can provide secure, transparent, and easy access to petty cash for operational costs. Indeed, credit cards for business purposes allow multiple personnel to hold cards, and if anything goes wrong, every other card on the account will be frozen. This is the case if different employees have separate business accounts.
What are the benefits of using business credit cards for expenses?
There are many advantages to using a business credit card to pay for expenses.
Centralises operating expenses
Many business owners appreciate that it centralises the management and administration of operating expenses. Instead of an administrator or the company accountant having to handle swathes of receipts and expense claim forms to prepare the monthly accounts, a business has the power to issue multiple corporate credit cards to key staff members and then manage these expenses through accounting software like SAP.
Admin and responsibility
Staff don't have to be responsible for holding cash and less administrative overhead for the finance team.
Security and efficiency
You may get to enjoy better security through fraud protection, improved cash flow via access to funds within your limit at any time, increased efficiency, and separate business and personal expenses.
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What are eligible employee expenses?
Costs incurred in the normal course of business
As a business owner, you might pay an employee's expenses to cover several different costs incurred in the normal course of business. These expenses can be reimbursed if the employee incurred the expense exclusively and necessarily in the performance of their duties and expenses are reimbursed via vouched receipts or a credit card for business expenses.
Director expenses
According to HMRC, employees also include directors of your company, so the first point applies to your own expenses too.
Meals and accommodation
The most frequently used expense type for employees is business travel, which covers the cost of travel, meals and accommodation.
Travel-related expenses
You are entitled to reimburse employees for travel-related expenses tax-free in the following circumstances; the employee is required to be away from their normal place of work to carry out their job, travel expenses must be incurred to carry out the necessary duties of employment, and subsistence expenses should be incurred due to travelling to perform the normal employment duties.
How much can you afford to borrow?
If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.
Want to understand the cost of your loan?
Use our business loan calculator below to find out how much you can borrow to take your business to the next level.
Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
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Financial product information
Representative example*
• 7.63% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,252.94. The total amount payable is £54,070.56
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 2.75% APR
Repayment period
1 month to 30 years terms
How are business credit cards different from normal credit cards?
Similarities
Even though company credit cards function the same way as personal cards, some differences are worth noting.
Cash flow of your business
First, you can borrow more with a business credit card because it is based on the cash flow of your business, not personal finances.
Company's credit score
A business credit card can even help you to build your company's credit score, which can help you to access loans or credit lines in the future.
Who is eligible for a business credit card?
Sole trader or owner
As a sole trader or owner of a small business, you will have no problem applying for a business credit card to pay for day-to-day expenses or ad-hoc acquisitions. Usually, there is no minimum amount in company revenue to qualify, but you will need to be a registered business in England, operating in a recognised industry.
The following factors
High street banks and lenders will offer different products and perks to other companies depending on some or all of the following factors; startup or established business, company with sales of up to £3 million, company with sales of £3 million+, international businesses, financial services industry.
Company expenses
It's important to know that business credit cards, which you intend to use for company expenses, are only available if you are over 18 years old and are a UK resident. Your business must also be registered in England. Sometimes, cards are only available if you also open a current account with the provider.
Learn more about business credit card expenses
Spending limits
Spending limits can be set for each card. For example, you might want your head of sales to have a limit of £20,000 to cover business travel and client hospitality. The limit for less senior employees can be set to a lower threshold. Remember that unpaid credit card balances will most likely be considered debt if your business applies for funding in the future.
What types of business expenses can you use a business credit card for?
Business owners can allow employees to use credit cards for anything from office suppliers, client expenses and the following:
Paying supplier invoices
Travel expenses
Equipment
Gifts
Furniture
If you are in a position to repay the balance at the end of the month, you could allow employees to use these cards for large purchases instead of taking out a short-term loan. However, remember that if there is any unpaid balance on any card at the end of the month, you will be liable for high-interest rates. The risk of not paying off the balance in full puts many businesses off using credit cards for expensive purchases, even though cards offer convenience. Fees, penalties, and interest charges might be a reason to apply for alternative funding.
Best business credit cards in the UK
Here is a short list of the top business credit cards for expenses in different categories.
Best for points
The American Express Business Gold Card Annual fee — £175 Variable APR n/a (charge card) Perks — Earn membership rewards points with a welcome bonus
Best for cashback
Barclaycard Select Cashback credit card Annual fee —£0 Variable APR 21.9% Perks — 1% unlimited cashback
Best for low fees or APR
Capitalontap credit card Variable APR 9.9% Perks — 1% unlimited cashback
Best for basic
American Express Basic Business Card Annual fee —£0 Variable APR 0% Perks — no annual fee
Best for managing spend
RBS Business Plus credit card Annual fee —£70 Variable APR 29% Perks — up to 2% cashback
Best for a small business
Annual fee —£30 Variable APR 23.7% Perks — 1% unlimited cashback
Business credit card alternatives
There are many alternatives to business credit cards, including, but not limited to:
Revolving credit facilities — a business credit line that provides consistent and pre-approved funding so you can easily access funds.
Unsecured lending — if you don't need the flexibility that a revolving credit facility carries, unsecured business loans might be a cheaper way of accessing funding. Like credit cards and credit lines, they're unsecured, but by using a fixed term, interest rates can be as low as 7–15%
Merchant cash advance — this is a revenue loan, where a lender looks at your recent customer card transactions and lends an amount based on this, which you repay as a percentage of card sales via the card terminal.
Invoice finance — allows you to 'sell' or discount your unpaid invoices to a lender, who will advance you most of the value immediately.
How do I apply for a business credit card?
Funding Options helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options can introduce applicants to a number of providers based n the applicants' circumstances and creditworthiness, with all quotes being subject to status and income.
Our award-winning platform, Funding Cloud(™), accurately and quickly matches businesses with the right lender and finance option for their needs. From unsecured business loans to revolving credit facilities and a merchant cash advance, we work with over 120 lenders offering dozens of lending products. Apply for funding in minutes - our record from application to credit approval is just 20 seconds, and cash in the bank within as little as 18 minutes.
Apply for a business credit card today to get the funding you need to trade, plan, and grow with confidence.
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
