Without a credit card, businesses may miss out on opportunities to make large purchases or take advantage of rewards and perks. This can ultimately hinder their growth and success.

Choosing the right business credit card is important if you’re a business owner.

What Is A Business Credit Card?

A business credit card is a type of credit card specifically designed for businesses. Business credit cards offer a variety of features and benefits that can be helpful for businesses, such as the ability to make large purchases, manage cash flow, and earn rewards.

Some benefits of using a credit card for business  include:

• Using them to make online and in-person purchases
• Rewards and perks that can save money, such as cashback on common business expenses like office supplies, gas, and travel
• Building the business credit score
• Managing the expenses with features like online account management and spending alerts
• Creating a positive payment history that can reflect positively on the credit score will help qualify for better financing terms in the future.

How Do Business Credit Cards Work?

A business credit card in India works the same way as a personal credit card. Businesses can use their business credit card to make purchases and either pay the balance in full each month or carry a balance from month to month. Business credit cards also typically have higher credit limits than personal credit cards.

One major difference between business and personal credit cards is that businesses are often required to provide a personal guarantee when they apply for a business credit card. This means the business owner is responsible for repaying the debt if the business cannot do so.

How to choose the best business credit card

When choosing the best business credit card, businesses should consider their spending habits, business type, and the perks and rewards they’re looking for.

1. Find the right business credit card for your needs by providing the documents needed for the credit card. 

There are a lot of different business credit cards on the market, so it’s important to find one that meets your specific needs. 

For example, businesses that make large purchases regularly may benefit from a business credit card with a high credit limit. Those looking to manage their cash flow may benefit from a business credit card with 0% APR for an introductory period, while those that travel frequently may benefit from a business credit card that offers travel rewards.

2. Compare different business credit cards.

Once the options are narrowed down, compare different cards side-by-side. This will help you find the best card for business.

3. Fill out an application. 

Once you’ve found the right card, it’s time to fill out an application. You can apply for a business credit card online or offline by including all the required information. 

The documents required for a credit card are: 

• Personal identification, such as a driver’s licence or passport
• Business identification, such as a business licence or incorporation papers
• Financial statements, such as bank statements or tax returns
• Personal credit report
• Business credit report
• Application form
• Annual fee, if applicable
• Security deposit, if applicable
• Co-signer, if applicable

4. Wait for approval. 

After applying, wait for the approval. If approved, you’ll receive the new business credit card in the mail within a few weeks.

5. Start using the business credit card 

Now that you have a business credit card, it’s time to use it. Use it wisely and only charge what you can afford to pay back.

for a with FlexiLoans and get funding in as little as 24 hours! We offer collateral-free msme loans with minimal documentation and competitive interest rates. Our online application process is simple and fast, so you can get the loan of need to grow the business quickly and easily. Apply for a business loan now and get instant approval! Check your business loan eligibility & business loan interest rates.

Conclusion

A business credit card can be a helpful tool for businesses of all sizes. It can help businesses manage their cash flow, make large purchases, and earn rewards. When choosing one, businesses should consider their spending habits, business type, and the perks and rewards they’re looking for.

Businesses can apply for a business credit card online or offline by including all the required information. Once approved, businesses can use their new business credit card to make purchases and earn rewards.

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The procedure to get a business license in India is different for different businesses depending on specific criteria such as the size of the business, type of the business, the sector, geographical jurisdiction, etc.

What is a Business License?

A business license is a legal document issued by government agencies that permit you to engage in a specific type of business activity per the juridical guidelines of the land in which the business is located.

What are the Benefits of Getting a Business License?

Getting a business license permits an entity to operate within the mandate of central and state regulations. Failing to obtain a license or renewing them in time may lead an entity to face a penalty, or worse, permanent termination of business.

Here are some benefits of obtaining a business license:

• Adherence to regulations also entails businesses getting access to various facilities, schemes, subsidies and support offered by the government of India or other organisations. Find out about the best business loans offered by the government of India.
• Another benefit is that businesses with licenses have a competitive edge over others during negotiation processes.
• A business license also instils faith in the business by the public and other stakeholders, holding businesses accountable for their actions.

How to Get Business License in India?

The business license obtaining procedure depends on the type of business, location, size etc. However, specific mandatory registrations that are common to most states are as follows:

Business Name Registration: It is advisable to get the business or brand name registered as early as possible to avoid copyright or other infringement issues later.

GST Registration: Entrepreneurs need to be informed about the different guidelines mentioned under the GST Act and get registration and other compliance as and when required.

State Business License: All business entities must obtain a trading license under state government regulations as and where necessary.

It is advisable to get expert and professional assistance with getting the right business license at the right time. This will help minimise the chances of penalty and error. Depending on the type, there is also a mandatory requirement of different permits while setting up a business.

Types of Business Licenses in India

The most popular types of business licenses in India can be categorised as follows:

Company License

The registration of companies and limited liability partnerships (LLPs) in India is regulated by the Ministry of Corporate Affairs. Registration as a company renders a perpetual existence, separate legal identity and limited liability protection for the business. After turnover increases beyond a certain limit, registration will help the business grow and expand systematically.

There are different forms of companies as per the Companies Act, 2013:

One Person Company (OPC): The concept of One Person Company registration was introduced in 2013, and it allows a sole proprietor to register their business and legally carry on their business operations.

Private Limited Company (PLC): Such a company prefers to restrict shareholders within specific groups.

Public Limited Company (PLC): A public limited company is different from a private limited company because it may invite the general public to invest in its company as shareholders without any specific preference for any particular group.

GST Registration

Business entities that fall above the specified threshold limit of turnover and businesses with intrastate supply are required to register under Goods and Services Tax. Several additional criteria require businesses to register under GST compulsorily. GST registration must be done online within a predetermined time period for new businesses. Find a checklist of documents to register a business under GST.

Registration under Udyam

The Udyam online portal manages the registration for small businesses in India. While registration under Udyam is not mandatory, there are many benefits associated with registration, such as government loan schemes, subsidies, etc. The eligibility conditions for Udyam registration are defined in terms of composite criteria of investment in plants and machinery and turnover of the business. Find out in detail about the small business registration process.

FSSAI License or Registration

The Food Safety and Standard Authority of India (FSSAI) is the regulatory authority to ensure the safety and standardisation of food products in India. All retail stores, trade outlets, kiosks, selling food items, restaurants, caterers, cloud kitchens are required to abide by and obtain license and registration under FSSAI and renew them from time to time. The licensing or registration requirement is categorised as follows:

• FSSAI Basic Registration: For turnover up to Rs 12 lakh
• FSSAI State License: For turnover between Rs 12 lakh and Rs 20 crore
• FSSAI Central License: For turnover more than Rs 20 crore

Find out details on FSSAI registration.

Import Export Code

In India, export and import businesses require a special license known as the Import Export Code, which the Directorate General of Foreign Trade issues under the Ministry of Commerce. The registration can be obtained online at the DGFT website by submitting the mandatorily required documents. The necessary documents are a PAN card, identity card with address proof, business residence proof, current bank account proof, etc.

Licenses Required to Open a Retail Store in India

For opening a retail store in India, a license must be obtained under “Shop and Establishments Act”. The registration is issued under the state governments, and therefore, the guidelines differ from state to state in India. The Act regulates all shops and commercial establishments in the area and monitors business conduct to check child labour, working hours, working conditions, wage policies, etc.

Trade License for Online Business in India

With many easy online business loans available for MSMEs, many small entrepreneurs are looking toward the virtual medium as a preferred business mode. For small businesses, a sole proprietorship is the most convenient way to run a business as fewer compliances are followed. A sole proprietorship can obtain a trading license in the same manner as a traditional shop under the Shop and Establishments Act.

Licenses Required for Factory in India

For running a factory in India, registration must be mandatorily obtained under Factories Act, 1948, which the state government grants. There may be an additional requirement of permits as per the type of business and the state regulations under safety, welfare and labour measures.

Other Licenses and Registrations

There are many more additional types of businesses that are not covered in the above list. To ensure public and environmental welfare, the government mandates licensing and permits wherever it is deemed necessary. For example, insurance providers are regulated by the Insurance Regulatory and Development Authority, and the Reserve Bank of India regulates the banking and microfinance sectors.

Eligibility

The basic eligibility requirements for applying for a business license:

• The applicant should not be a minor, i.e., must be at least eighteen years old.
• The applicant must not be under any legal probation for a serious offence.
• The business should be legal.

Documents Required

The documentary requirement may be different for different types of authorities and types of businesses. However, the following is a general checklist of documents required for the registration process:

• Pan Card
• Driving License/Voter ID/Aadhaar Card
• Passport
• Bank statement
• An Address proof or a no-objection certificate from the landlord
• Rent Agreement or Lease Agreement
• Authority Letter of Business
• Memorandum Of Association and Article of Association.
• Partnership Deed

FAQs

Is a business license the same as a permit?

A business license and a permit are different. A business license confirms that your business has complied with the state’s rules and regulations, while permits usually ensure the business follows safety and precautionary measures.

How do you obtain a business license?

You can obtain a business license by visiting the premises or website of the state regulatory authority where the business is located.

What are the different types of business licenses and permits?

• Company License
• GST Registration
• Small Business Registration
• FSSAI License or Registration
• Import Export Code
• Licenses Required to Open a Retail Store in India
• Trade License for Online Business in India
• Licenses Required for Factory in India

What happens if you’re running a business and don’t have a business license?

The business may be penalized or even asked to shut down by the regulating authority in cases of non-compliance.

The post Business License in India – Types, How to Get Business License appeared first on FlexiLoans Finance, Business Loan Blogs, Tips & Guide.

If you miss or delay an EMI, you will be charged a late fee in addition to the penal/default interest. If you have a collateralized loan, such as a home loan, car loan or loan against property, the bank has the right to seize or confiscate your asset. Delays in paying monthly EMIs can also hurt your credit score. It can have long-term consequences for your financial well-being and make it more difficult to obtain a loan in the future.

Benefits of Paying Credit Card EMI Payments on Time

While the most apparent benefit of making on-time EMI payments is a lower financial burden, you can avoid paying a substantial amount by making monthly on-time payments. But there are many other benefits that you may not know of. Let’s check them out.

Improve your credit score

Your credit history often determines the size of your loan and interest rate. Your credit score will improve if you already have a loan and make on-time EMI payments. Your excellent credit is bolstered by timely repayment of each monthly installment. When you apply for a loan, the banking institution will frequently consider your good credit history before accepting your loan request. If you have a good credit history, you may be able to get a larger loan amount.

Prevent paying late or default fees

Failure to repay a debt as well as making late or no payments on a loan can have serious consequences for the borrower. Lenders may seize your assets if you fail to make EMI or loan payments regularly. Furthermore, if you default on your loan, they may levy a hefty penalty. The fine is frequently calculated as a percentage of the outstanding EMI. However, if you make your EMI payments on time, you won’t have to worry about these scenarios.

Get access to top-up loan options

A top-up loan is a type of financing in which the borrower receives a loan in addition to the one he/she already has. This is available to borrowers who take out a personal loan, a business loan, or a mortgage.

The borrower only needs to make sure that all monthly EMIs are paid on time. It will improve your credit score, and as a result, you may be able to secure a new loan to cover the shortfall. Also, topping up a home loan carries the same interest rate as a regular home loan, making it less expensive than an unsecured personal loan for any given reason.

Improve your credibility

Borrowers and financial institutions have a two-way relationship. Lenders make money by charging borrowers fees and interest. Borrowers, on the other hand, rely on lenders for financial assistance. However, lenders will only lend money to those they believe will repay it on time.

Your credibility in this relationship may enable you to obtain loans or a higher credit limit. The only way to establish credibility is to make timely payments. In turn, lenders will offer you a higher credit limit and more appealing products, such as low-interest loans.

Prevent paying high interest rates

The interest rates on credit cards are the highest for any financial instrument. In some cases, the annual percentage rate can reach 35-40%. Each day, it is calculated based on the accumulated interest on the outstanding balance. Due to the high interest rates charged by credit card companies, paying off your credit card debts late can result in accumulated interest charges. If not managed correctly, you may end up paying far more than what was originally agreed upon.

Increase your credit limit

If you pay off your credit card EMIs on time and in full each month, you may be able to increase the credit limit on your card. This is useful if you ever find yourself in a bind and need money. Higher credit limits may assist you in saving money by lowering your credit usage percentage. This ratio represents the difference between your credit card limit and your actual spending on the card.

If you only use a small portion of your available credit and repay it on time, you can improve your credit history and score. Reduce your credit usage ratio as much as possible, as this will improve your credit score.

Get loans at lower interest rates

As discussed earlier, paying your credit card and loan EMIs on time can improve your credit score and history. This can help you secure a larger loan amount. But there is another benefit that you get by making timely payments. You can secure loans at lower interest rates. The better the credibility and credit score you have, the lower the interest rate the banks charge.

For instance: You need loans for a new business, and you now seek to apply for a business loan or MSME business loan for a new business. The better the credit history and score you have, the greater are the chances of securing a loan at lower interest rates.

You may also be offered gift certificates, large credit limits, and shopping cards by your lender. It can give you a better experience and offers on both online and offline purchases.

Tips to Make Sure You Make Timely Loan and Credit Card EMI Payments

Now that you know how important it is to make timely EMI payments along with its benefits, here are a few tips to help you pay EMIs on time.

Analyze your monthly expenditure

If your EMI payments are eating up more of your monthly spending than you anticipated, it’s time to make some changes. It’s a bad idea to spend money on frivolous things like nightclubs, movies, and fancy restaurants. Also, try to keep your use of credit cards to a minimum. Because credit cards have higher interest rates, using them can increase your debt load unnecessarily.

All of these things can help you make better financial decisions. Also, there are several EMI calculators available that can assist you in determining your monthly payment obligations before taking out any loans.

Increase repayment amount if possible

Be a wise borrower and increase the amount you pay for your monthly EMI if your income increases. It’s one of the simplest methods for quickly getting out of debt. Here’s an example to help you understand: What happens if your monthly income increases by 30%? At that point, you can increase your monthly payment by 5 to 10%.

You can increase your EMI payment amount annually in the same way that you can increase your expenditure. When you have extra cash in hand, paying off your debt ought to be the top priority.

Leverage your investment

Do you feel the weight of a high-interest loan on your shoulders? Is your financial situation deteriorating as a result of EMI payments that have been missed? So, here’s a way to get around it. A PPF or a life insurance policy can now be used as a collateral to secure a loan.

The PPF allows investors to borrow against the remaining principal after the third year of investment. The original sum, however, is subject to a three-year return requirement. You can sell your mutual fund shares or certificate of deposit to pay off your debts (CD).

If you have an FD interest rate of 7% and a loan interest rate of 16%, liquidating your investment can help you pay off your EMIs on time.

Debt refinancing/consolidation

If you have a lot of debt, it may be difficult to make your EMI payments on time. If you do not pay your EMIs on time, you will be penalized and your credit rating will suffer. Debt consolidation, also known as debt refinancing, may be an option for lower-interest-rate business loans. The idea is to borrow money at a lower interest rate than you are currently paying on your current debts. You can use this method to reduce your overall debt and reorganize it so that you can pay it off faster. If you have a lot of credit card debt, you can use a personal loan to help you pay it off. Because personal loan interest rates are much lower than credit card interest rates, you can simply repay the entire loan amount.

Final Words

Examine your earnings before applying for a business loan. The general rule is that your EMI should never exceed 50% of your gross earnings. Unexpected events may jeopardize your repayment capacity. Instead of fleeing from your lender, look for a plan that allows you to make consistent online EMI payments. It will assist you in building a better credit history and giving you access to more and better borrowing options in the future.

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