How to report income on a business credit card application – Forbes Advisor

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A credit card designed specifically for business spending can quickly become a staple in any business owner’s wallet. Applying for a credit card is a fairly straightforward process, but business owners should be careful to accurately report their income and income. Typically, a credit card issuer requires a gross annual income from the previous year on a business card application. The applicant must report all income before taxes and expenses.

Why is business income needed?

Credit card issuers use three elements to assess whether the applicant will spend responsibly and be able to make monthly card payments on time:

  • turnover
  • estimated monthly expenses
  • personal income

Issuers also use this information to set a credit limit. The higher the income of the business, the more likely the applicant business is to be approved and the higher the limit.

What must be declared?

Most business credit card applications require gross annual income from the previous year. This includes any money from sales or services, stock sales, or anything else that makes the business money. Make sure you don’t subtract expenses or taxes from annual income (there is no need to split profit or net income).

Be careful not to report sales forecasts as revenue (unless the issuer specifically states that this is acceptable). In general, only income that can be verified should be reported.

Small business owners can choose or be asked to report both business income and personal income to assure the issuer that they are able to make monthly payments on their business card. Keep in mind that a business card applicant does not need to have a registered business to qualify. Sole proprietors (like freelancers or Uber drivers) can also benefit from a small business credit card. Simply report the income from the previous year (before taxes) as income.

What should be left out?

Be careful not to report income or income that cannot be verified with pay stubs, receipts, invoices or other documents. Credit card issuers can ask for tangible proof showing that the applicant has earned what they claim.

Do not report any personal income that is unrelated to the business declared in the application. For example, if the applicant has a full-time job at a fast food restaurant and the application is for a business credit card for their graphic design activity, the fast food restaurant salaries should not be included in the income of the company. ‘business. (However, fast food wages can be reported as personal income.)

What if a candidate has no business income yet?

Not having any business income yet is not necessarily a deciding factor in applying for a business credit card. Applicants can enter $ 0 as income as long as they are able to indicate their personal income later in the application. Any income from part-time or full-time employment, a spouse’s income, or business profits can all be reported as personal income on the application. The credit card issuer will use this information to determine if the request will be approved and to set the amount of the credit line.

Depending on the issuer, some applicants may enter new business sales forecasts as revenue. The requester should call the sender to ask if this is acceptable. Do not do this without the explicit permission of the issuer. Keep all screening documents handy in case the issuer requests proof.

Above all, don’t lie about the app. This is illegal and can lead to heavy fines or jail time.

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Final result

Business owners and sole proprietors can qualify for business credit cards. Report the gross annual income (before taxes and expenses) of the previous year on the request. Entering personal income can help increase the chances of approval, especially if a new business owner does not yet have income to report. Be careful not to lie down on the application, which could have serious consequences.


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