# Business Credit Card Declined - What now?



## ganpingin (25 Nov 2008)

Hello All, 

Looking for some friendly advice...Our small business is up and running 4 months and we applied for a business credit card with our bank. It has been declined because we are not up long enough (credit crunch indeed!). 

We need to make some crucial purchases online, which we cannot do without a credit card. Up to this we have been using our personal cards for business purchases and charging them as an expense. However our accountant called this "Messy" and told us to charge directly to the business.
To be clear, we do not need the credit as such, just the facility to purchase online, and disposable credit cards such as V3 have too low a limit, bank transfers and cheques are not accepted either. Ideally a laser would work, but the bank does not offer that for businesses.

Does anyone have the foggiest how we could do this without a credit card? Is it really that bad to make purchases personally and then charge them as an expense?

Is there another way? All advice really appreciated, and in the knowledge that it would be more appropriate to ask our accountant this, suggestions are still really welcome and may also help others in this very difficult time for new businesses.

Thanks!


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## brid1977 (25 Nov 2008)

I have a laser card on a BOI business account - tell your bank you will change to BOI if they will not give you one. They offered me a business credit card after the account was opened 18 months.
http://www.askaboutmoney.com/showthread.php?t=91879&highlight=laser+card+business+account


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## Brendan Burgess (25 Nov 2008)

It would be cleaner using your own business credit card, but you can continue using your personal credit card account. 

Keep the letter from the bank refusing you a credit card. I doubt if there would be any problems, but just in case. 

But the laser card suggested by Brid might be even better. 

Brendan


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## ganpingin (25 Nov 2008)

Thank you both for the suggestions. We have not received a letter from the bank declining us, we had to call to find that out, apparently they are not obliged to send us a letter 

Alas we are not with BOI, but I like the notion of suggesting a changeover in the hope a mild (probably empty) threat will coax them into supplying a laser!

Apart from the accounting nightmare, why is it such a bad thing to charge personally and claim it as an expense, passing on the purchase to the company?
(bearing in mind there are only the 2 directors in the company)


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## Bubbly Scot (25 Nov 2008)

I'd use the BOI angle too. I have a business account with them with a laser card and credit card. The credit card would be ideal perhaps for you as you set your own limit and they take the balance due every month. I don't know if there is a criteria for the credit card, I asked for them about 18 months after we opened the account and there was no problem at all.

We got two years free banking with them too.


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## dave2k (25 Nov 2008)

Alternatively, you could go with Halifax and get a Visa debit card. Works exactly the same as a credit card for online purchases and as you don't need the credit, might be perfect for you.


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## steph1 (25 Nov 2008)

Have a look at the ryanair.com website.  They are just launching a card that you preload its a mastercard.  You dont have to go through any credit checks but I think there is a one off fee to purchase it and then you just preload it.  Perfect for purchasing off the internet.  Just look at the conditions on it though as it mentions something about having more than 1k balance.


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## ganpingin (25 Nov 2008)

steph1 said:


> Have a look at the ryanair.com website.  They are just launching a card that you preload its a mastercard.  You dont have to go through any credit checks but I think there is a one off fee to purchase it and then you just preload it.  Perfect for purchasing off the internet.  Just look at the conditions on it though as it mentions something about having more than 1k balance.



Thanks for that, however I doubt that accounting for that would be any less of a nightmare that putting it through our own personal accounts! As for Halifax, they do not seem to do business with businesses in Ireland.

Just to be clear, I need a solution for a business. Ideally, a v3 type card designed for businesses that accept bank transfers as prepayment would be ideal. Alas, it seems to be a figment of my imagination.


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## Complainer (26 Nov 2008)

It might be handy to get an additional card (e.g. for your spouse nominally) on the personal account to keep spending seperate.


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## myate (26 Nov 2008)

Wow credit crunch indeed. When I opened my business a/c in 2007, I got a CC immediately! I do still occasionally have to put the odd business expense on personal card though. My accountant has never said anything...just treats it like a normal cash expense I thinnk.


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## dereko1969 (26 Nov 2008)

presumably you will have VAT issues if you are paying for the products and claiming them as expenses? you should talk to your accountant regarding this.


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## ganpingin (26 Nov 2008)

Complainer said:


> It might be handy to get an additional card (e.g. for your spouse nominally) on the personal account to keep spending seperate.



I don't really understand the advantage of this, the problem we are having is that we cannot get a separate business CC or laser from our bank and are therefore forced to use our personal accounts for online spending. Can you clarify please?



dereko1969 said:


> presumably you will have VAT issues if you are paying for the products and claiming them as expenses? you should talk to your accountant regarding this.


Have done, thus the accountant deemed this method as "Messy". But we have little other option at this point.

Thank you all for the replies so far.


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## leex (26 Nov 2008)

dereko1969 said:


> presumably you will have VAT issues if you are paying for the products and claiming them as expenses? you should talk to your accountant regarding this.



Where I work I vaguely recall being told that where we pay for an item ourselves and then expense it that the vat cannot be claimed on this. I may be wrong - was a while ago.


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## Lauren (26 Nov 2008)

So what are the VAT implications? Does this mean that you cannot reclaim the VAT if you have used a personal card for expenses?


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## ganpingin (26 Nov 2008)

We were told that if the purchase is passed on to the company as an expense, then the VAT may be reclaimed on it _by the company_, as it is now the company's purchase. However this is messy and needs justification/clarification/tracking financially, and therefore it is a better (and far more correct) approach is to have an item directly purchased by the company itself.
(I sure as hell hope that this advice is correct, otherwise we are in a pickle!)

I am speaking of a limited company here, to clarify. It is probably very different for sole traders.

Are there any other start ups in our position here? Unable to buy online due to lack of laser/credit card?


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## mathepac (26 Nov 2008)

@ganpingin, have you looked at the possibility of using PayPal company account for on-line purchases?

A debit-card is of limited use IME if your purchases are from non-Irish sites or even Irish sites that have bought templates ecommerce sites off the shelf.

I won't pretend to be a big eBay / PayPal fan but a PayPal account can be useful.


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## ganpingin (26 Nov 2008)

That is a really good idea mathepac, thank you, I will certainly look into it!
Alas, I we have one essential purchase that will only accept laser/cc.
Nonetheless, thank you!


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## Gulliver (26 Nov 2008)

Gangingpin
If your bank has an issue regarding risk/availability of funds/credit crunch, then the issue really concerns the size of credit limit on the account.  Why not ask your bank for a card with a low limit.  If/when you need to make a large purchase, you can place some credit funds in the account


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## nai (26 Nov 2008)

Why does you accountant have an issue with this - sounds like laziness on his/her part to do the reconciliations ? I use my personal cc for exactly the same function - get the invoices made out to the business and then just write a company cheque/transfer exact amount of purchase from company a/c to personal a/c and all is fine and my accountant has never raised it as an issue- he suggested it in first place - rather than getting company cc


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## Celtwytch (26 Nov 2008)

Complainer said:


> It might be handy to get an additional card (e.g. for your spouse nominally) on the personal account to keep spending seperate.


 
If you're talking about an additional credit card, that wouldn't really work, as the statement doesn't discriminate between the purchases made on each card - it all just gets listed as though only a single card was used.


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## ganpingin (26 Nov 2008)

nai said:


> Why does you accountant have an issue with this - sounds like laziness on his/her part to do the reconciliations ? I use my personal cc for exactly the same function - get the invoices made out to the business and then just write a company cheque/transfer exact amount of purchase from company a/c to personal a/c and all is fine and my accountant has never raised it as an issue- he suggested it in first place - rather than getting company cc



Interesting Nai, perhaps my accountant is making a mountain out of a molehill here?


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## Complainer (26 Nov 2008)

Celtwytch said:


> If you're talking about an additional credit card, that wouldn't really work, as the statement doesn't discriminate between the purchases made on each card - it all just gets listed as though only a single card was used.


I have two credit card accounts, each with a seperate card for my missus, and it both cases, the statements list her transactions seperately.


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