A business credit card can provide essential flexibility when your startup it getting off the ground. Explore options and alternatives, including interest rates, limits and eligibility.
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When you’re an early-stage startup, finding the money to get your business idea off the ground can be a challenge. For many budding founders and entrepreneurs, the answer to their initial cash flow issues is to sign up for a business credit card.
Having a business credit card opens up a line of credit to cover those essential purchases, business expenses and new operational costs.
But which business credit card should you choose? How do they compare? And is a credit card the best way to fund the initial stage of your startup journey?
Banks and credit providers know that startups need simple access to credit. Many offer credit cards designed for new or early-stage businesses. These cards help you manage your initial expenses and overheads – and start to build up a credit history.
Building your credit profile is a critical part of making your startup more financially stable. It shows that you can manage making regular repayments and that you don’t overstep your credit limit. It also provides tangible data of your credit history.
A business credit card works in a similar way to a personal credit card, but will be issued in the company’s name and used only by authorised team members.
Business credit cards for startups will usually:
When you're comparing business credit cards, you'll come across two important figures: the purchase rate and the Representative APR. Understanding the difference is key to choosing the right card for your startup.
The Purchase Rate is the straightforward interest rate applied to your purchases if you don't pay off the balance in full each month.
The Representative APR (Annual Percentage Rate), however, shows you the bigger picture. It represents the total annual cost of the card, bundling in the purchase rate plus any compulsory charges, like an annual fee. It’s the official figure used for comparison.
There’s a big choice of business credit cards available on the UK market. Before you choose a card, it’s important to do your homework and to narrow down the options to a business credit card that will fit the precise needs of your startup.
Let’s take a look at seven of the top business credit cards for startups and new businesses and see how they compare.
NOTE: Figures accurate at of 1st July 2025.
The American Express Business Gold Card offers flexible credit amounts and additional membership points. There’s no upper credit limit, but the balance must be paid in full every month. There’s also no annual fee for the first year, which helps to cut down the barriers to entry. You will need a year’s trading history to apply.
Note: this is a prime example of a higher APR due to annual fees. The purchase rate on the card is 30%.
The Barclaycard Select Cashback Business Credit Card may be a good fit if you have a projected turnover of at least £10,000. The card offers uncapped 1% cashback on spending over £2,000 monthly and up to 56 days interest-free credit. Approval depends on your financial circumstances and borrowing history. A key advantage is that there’s no annual fee for using the card.
The Capital on Tap Business Credit Card offers rewards and potential credit limits up to £250,000, though your initial limit will be lower as a new startup. The card requires a minimum £2,000 monthly turnover but may consider newer businesses based on the director's credit history. It offers cashback or Avios points and there’s also a Pro version which has additional benefits for points and travel (costing £299 per year).
The Lloyds Bank Business Credit Card offers borrowing up to £25,000 with up to 56 days of interest-free credit on purchases, if paid in full. You may be eligible as a new business, subject to a credit assessment, and a personal guarantee might be required for limited companies. There's no annual fee for the first year and you earn 1% cashback on fuel and electric vehicle charging and 0.5% on other purchases.
The NatWest Business Credit Card is ideal if you’re a startup with annual turnover under £2m. It offers 1% cashback on fuel and EV charging, managed through the ClearSpend app. There's no annual fee for the first year, which helps to cut down on costs, and the card remains free if your annual spend is £6,000+. The card also offers up to 56 days interest-free when you pay your balance in full
The Metro Bank Business Credit Card offers flexible credit limits and no annual fee. The card provides up to 56 days to pay purchases without interest, but interest rates apply if the balance isn't cleared. It's suitable for managing business expenses, but approval depends on credit checks and your business circumstances.
The HSBC Business Credit Card offers credit limits starting from £500 and up to 56 days interest-free on purchases. You can manage and control spending by adding single transaction limits, but the card offers very few frills. There’s no cashback, no reward points and this is very much a basic business credit card.
If you’re a startup or new business with zero trading history, this could prove to be a barrier to you getting approval for a business credit card.
Many traditional card issuers will place significant limitations on your credit use, or may decline your application altogether. In these cases, secured cards or founder-guaranteed options may be more accessible, or you could consider building a relationship with a business bank account first before applying for credit products.
The business credit card that’s best suited to your needs as new business will be dependent on a number of factors. Your monthly turnover, your trading history and your personal credit profile as a director all need to be factored in.
Based on the seven business cards we’ve reviewed, the Capital on Tap Business Credit Card is a good option for early stage startups.
Remember, though, that what’s right for your specific business may differ from the Capital on Tap offering. Always do your research and see how the major high street banks and other challenger banks measure up.
If you need a business credit card but have no credit profile, it’s worth considering applying for a secured business credit card.
Secured cards require you to pay a deposit before the card is approved. This deposit becomes the collateral for this line of credit, with the amount of the deposit becoming your credit limit for the card.
But which is best for you? A secured or unsecured business credit card?:
Unsecured cards are harder to qualify for but more flexible. Secured cards are easier to get approval for, but will offer smaller credit limits.
Business credit cards for startups with no revenue, bad credit or limited trading history are rare. As we’ve seen, the Capital on Tap Business Credit card is a flexible option if you’re in this position. But banks and credit providers are risk-averse and unlikely to extend credit if your startup doesn’t look creditworthy. Some providers offer options based on personal credit, not business revenue.
The key is to make your startup as low-risk as possible, by focusing on building a credit profile and improving your financial stability.
To improve the chances of being approved for a business credit card:
By using a business credit card you’re essentially entering into a credit agreement with your bank or credit provider. This is no different to taking out a small business loan, in principle, and attracts the same kinds of risk.
Let’s look at the risks of taking out a credit card:
There are risks to entering into any kind of credit agreement. But you can get proactive about reducing those risks.
For example:
Credit cards and business loans both require your startup to enter into a finance agreement. And both offer ways to bring capital into your business. But which is the best fit for an early stage startup that has minimal trading history?
Let’s look at the two different use cases:
As a new startup, getting approved for a business credit card can be a first step in building up a credit profile – a vital stage in stabilising your finances.
But once your business grows, flexible loans like those from iwoca may offer larger amounts of capital, more control and better rates on your repayments.
Having a solid credit profile gives you the financial foundations to fund your startup’s vision. And having a business credit card can be that all-important first step on your credit journey, allowing you to demonstrate your creditworthiness to lenders.
To build business credit with your credit card, try to:
You’ve taken out a business credit card to kickstart your first steps as a fledgling startup. And you’ve got steady sales and revenues now coming into the business.
At this point, as you start to grow the company, it’s helpful to have fast and straightforward access to flexible business loans. This is what we offer at iwoca.
You can borrow from £1,000 to £1 million, as long as you have a reasonable trading history and evidence of your future cash flow.
Find out how a Flexi-Loan from iwoca can boost your capital.
