When you complete the “income” part of a app, you want to give your small business or side business the best, without stretching the truth. But income can vary widely from year to year, and credit card applications often don’t state what you should or shouldn’t include when filing.
So what counts as an honest, fact-based answer? Usually, in credit card applications, issuers want to know your verifiable gross income from the previous year.
Revenue is the money your business makes from sales, services, or other activities. NerdWallet asked top small business credit card issuers – American Express, Bank of America, Capital One, Chase, Citi and Discover – what, exactly, should be reported as income on a small business credit card application. company, and the responses were similar. General themes:
It’s important to stick to the facts when reporting your annual gross business income, but don’t sell short. Gross income can include multiple sources of business income.
“Typically, income comes from the sale of business products or services, the sale of surplus equipment or goods, the sale of shares in the company and various other sources, large and small,” Nikki Dolor , senior vice president and small business. responsible for underwriting cards at Bank of America, said by e-mail.
Important note: you – for example, a limited liability company or an S corporation – to report income on a small business credit card application. You can also report income as a sole proprietor. You could be a sole proprietor, for example, if you:
If you are a , be sure to indicate this on your request when the issuer asks you about the legal structure of your business. And in the field where you add your tax ID number, fill in your social security number instead.
When reporting income on a small business credit card application, it is best that you not understand:
When your business is new, you may not have any income to speak of. And it is good to say so on your request.
In an email, Chase notes that applicants must report $ 0 in income if the business has no actual income. And Dan Arellano, vice president of small business cards at Capital One, said via email, “You should only report actual business-generated revenue on the app. “
Policies vary by issuer, but declaring a large chicken egg for income doesn’t necessarily mean your application will be rejected.
“We need both revenue and revenue in our app,” Discover explains via email. “For new businesses that have no income, we will rely on the income for decision making. “
With some issuers it might be acceptable to include sales projections here as well. When businesses are new, “typically clients will report projected income based on their business plan, projected sales, and potential contracts,” says Dolor of Bank of America.
Just be sure to keep these supporting documents handy, in case the issuer answers any questions.
NerdWallet asked major small business credit card issuers what should be included and excluded from income reported on credit card applications. Here’s how each transmitter responded.
This article was written by NerdWallet and was originally published by .