Are you a business owner searching for an accessible business credit card that meets your business needs and your budget? A secured business credit card can help improve your credit, give you rewards and help you stay on budget.

These types of cards are a great option if you run a business and have a credit score that doesn’t qualify you for a regular business credit card. That’s why secured business credit cards are an excellent option for business owners trying to rebuild or improve their credit while growing their businesses. Here’s how a secured business card works.

How does a secured business credit card work?

A secured business credit card works the same way as a regular business credit card. However, the difference is that the cardholder provides a security deposit to the financial institution issuing the business credit card as security.

Cardholders cannot access the security deposit while the business credit card is still open. A secured credit card is similar to a prepaid business credit card in that the spending limit is typically the amount of the ‘prepaid’ security deposit. This helps to keep a business owner on budget as they can’t spend more than their security deposit. 

By paying your monthly credit card bill on time, you can slowly start to rebuild your credit score. The credit card issuing company will report to the credit bureau each month if the business owner’s secured credit card remains in good standing.

This is a key difference between a prepaid credit card and a secured credit card. Financial institutions that issue prepaid credit cards will not report to the credit bureau and they do not help repair credit scores. 

Do all banks offer secured business credit cards?

No, not all banks offer secured business credit cards. However, there are at least two financial institutions in Canada that do offer secured business credit cards:

  • Royal Bank
  • Desjardins

Typically, a business owner would first apply for a regular business credit card. If they aren’t approved due to poor credit, the bank would offer them a secured business credit card. 

If you have a poor credit score and are applying for a business credit card, ask the bank you’re applying to if a secured business credit card is an option if your application is denied. While your bank may not offer secured business credit cards, they will provide you with other options to consider.

Consider a Float Card

If you can’t get a traditional business credit card, and your bank won’t offer you a secured business credit, consider getting a Float card. The Float card works like a credit card, but it isn’t exactly your typical credit card. These cards are visa-issued, prepaid business credit cards that integrate directly with a company’s bank account.

What’s great about Float cards is that they do not require personal guarantees, which most business cards do. Businesses can also get an unlimited number of float cards for their employees at no cost.  

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Float Card Key Features

Float Cards also have integrated spend management software that helps businesses streamline how they manage their business expenses. Float cards are an excellent choice for the business owner who needs a business credit card but hasn’t built up enough credit history or money in the business to qualify for a traditional business credit card. The Float card also allows businesses to integrate directly with their bookkeeping software which helps to streamline and automate routine bookkeeping tasks. 

Float cards work on a prepaid model, which means a business’s credit limit depends on the cash balance in its bank account. If businesses don’t typically have a cash balance in their bank account used for business expenses, the Float Card is not a good option. 

The basic plan for a Float card is free, which provides access to accounting software integration, spend management solutions, unlimited virtual cards, and five physical cards for free. The professional plan is $99/month, which provides an unlimited number of virtual and physical cards and more finance management features. 

A Float card is a prepaid business credit card designed to help small businesses streamline both their business bookkeeping and expense processes. The card helps businesses allocate funds and approve expenses before purchases are made due to its integrated dispatch management software. Each card has its own spending limits, and no personal guarantee is needed for approval.

If a business is looking for a card that streamlines expense tracking, reporting, and business spending, the Float Card is an excellent choice. Apply with the Hardbacon Code and earn up to a $500 welcome bonus.

FAQs About Secured Business Credit Cards in Canada

What are the best secured business credit cards in Canada?

At least two financial institutions offer secured business credit cards in Canada: Royal Bank of Canada (RBC) and Desjardins. Typically, business owners will apply for a regular business credit card and will be offered a secured business credit card if the application is denied.

How to choose a secured business credit card?

With few banks providing secured business credit cards, the available options are much less than a traditional business credit card. However, choosing the best-secured business card option would come down to similar business credit card selection criteria: the interest rate on purchases and cash advances, annual fees, cost for additional cards, and if it offers cashback or reward points.

What are the eligibility criteria to get a secured business credit card?

Most secured credit cards offer guaranteed approval with a few caveats. Most secured business credit cards will require the applicant to be over 18 years old to apply and must be able to provide a refundable security deposit.

Can you be denied a secured business credit card?

Yes, you can be denied a secured business credit card. The applicant’s credit profile may be considered too risky or denied for another reason described in the fine print. Even though secured credit card companies will often say their secured business credit card approvals are guaranteed, they will have certain conditions that need to be met.

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