November 7, 2019
Many Malaysian entrepreneurs, when first starting a business, begin using a personal credit card for certain business expenses. However, once the business starts to grow, one should start to garner tangible benefits from using a good business credit card — i.e, a credit card in your business name that is used strictly for business purposes. When used responsibly, a business credit card allows you to invest in resources that will help your business grow when you may not have cash on hand. Most personal credit cards on the market carry rewards and benefits that are just as great, but we’re listing seven reasons why a business credit card would be better suited to help you manage your cash flow and daily operations more efficiently.
If you have a sole proprietorship, it’s important to treat your company as separate from your personal financial situation. That is important in order to maintain the limitation of personal liability.
If you mix your personal expenses and business expenses, you could ultimately lose the very legal protection you hoped to gain by incorporating a limited liability company. Also, for tax purposes, it is best practice to keep your business expenses separated. A business credit card by its very nature will keep business expenses separate.
Business credit cards often come with higher lines of credit, which is how many small businesses get off the ground.
One example where a business credit card excels is in times of adversity when sales are low and the business is strapped for cash. If the business owner has a business credit card, he will be able to access funds to run the business and this can act as a temporary financial cushion for the business.
In short, business credit cards give you better spending power and help to create more wiggle room in times of economic difficulties.
Having a business credit card helps you establish a separate credit history for your business. Small businesses often get turned down for loans or get disadvantageous loan terms because they lack a credit history for their business.
If you get a business credit card, you’ll likely have a business credit score with major credit bureaus. The upside is that if you use your card responsibly, you could improve your score and get lower interest rates in the event you need to take out a business loan.
78.5% of SMEs in Malaysia are Micro-Enterprises
In today’s economy, more people will take the leap and work for themselves. There’s plenty of rewards and risks in being self-employed, but you can prepare for the latter with a business credit card. Whether you have temporary cash flow issues, want to earn rewards to offset some of your business spending or need to make a necessary business purchase, a business credit card can be a major benefit – if you use it wisely.
One card for all business expenses, including travel, entertainment, utilities, assessments, dining, insurance, and others. CIMB provides both a summary statement for the company as well as an individual card statement for the cardholder. This card provides cost reduction and convenience – no petty cash, manual claims and no manual bill reconciliation.
It makes the process of managing your expense budget easy, with less work on your part to see exactly where you are spending and how much. It also keeps records properly identified for tax purposes, making tax time much less of a headache.
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As your business grows and adds employees, delegation becomes a critical skill. You want to provide your employees authority and not require them to come to you on minor decisions. However, you will still require control over critical things such as your business’ finances, and that’s where the CIMB Platinum BusinessCard comes in – as a useful tool for delegation and individual card issuance.
The CIMB Platinum BusinessCard offers plenty of benefits. Apart from its irresistible dining and shopping privileges, and the perpetual waiving of its annual fee, it also provides unlimited 0.5% cash rebate on local spend and 1.25% cash rebate on overseas spend – arguably among the highest in the market today.
As a card owner, you will also enjoy a cash rebate of RM50 annually for 20 retail transactions performed within 12 months from your card issuance or anniversary date. Lastly, the card also comes with travel insurance coverage of up to RM1,000,000!
Exclusions apply, please refer to Terms and Conditions on the website for details.
Part of being a small business owner means constantly focusing on ways to increase the growth rate of your business. And any business person who has tried to apply for a loan from a bank without collateral can tell you how strenuous it can be especially when you do not have a well-established credit reputation.
In some cases, a business credit card comes bundled with a loan but the establishment of credit history does give your business some brownie points when applying for a business loan.
Take control of your cash flow with up to 50 days of interest-free credit with the CIMB Platinum BusinessCard* (T&C Apply). Click here to learn more.