Business credit cards have many useful features and advantages over other business credit options but one of their most powerful advantages is in allowing business owners to manage cash flow.

Managing cash flow is a top priority for most small to medium businesses (SMBs) and it can be achieved through three key features of a business credit card. The cash flow management aspects of the card are, the ability to use credit at any time, dedicated in-app and online tools, and reward programs.

All three of these features can be found in other products and services, for example the access to credit is also possible through a revolving credit facility. But only a business credit card bundles all of them together.

Cash flow issues

The typical reason for an SMB to have issues with cash flow is when business expenses need to be paid prior to receiving payment from customers. This can make for difficult times for a business, especially if customers are late with paying their invoices.
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A business credit card can bridge that gap without cost to the business. Taking advantage of the interest-free period for repayment means that the business can continue to operate smoothly without having to desperately chase payments. So long as the business is able to pay off the credit while interest is not accruing then it will be able to operate without cost.
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A business credit card also allows newer businesses to build up a credit history at speed so that bigger and more long-term credit products can be used if needed. It also helps the business to access that same credit at better rates of interest over time as the relationship between the lender and borrower becomes more nuanced and trust builds.
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However, sometimes payment issues last for longer than expected, so making sure that the interest rate is low when it comes into effect is important as well. Cash flow gaps such as these are not uncommon, businesses need to make sure they’re choosing the right product for their needs and are realistic about how reliably payments are made from their customers.

Cash flow management tools

Being realistic about payments is a difficult exercise, especially when your business has not been operating for longer than a few months or is affected by seasonal changes. But this is where the cash flow management tools included with business credit card products shines.

By plugging into your business data, a good management tool can provide forecasting insights into your business and project how your business cash flow will develop over time.

With Cape you have access to as many virtual cards as your business needs which can be broken down into teams and then employees. Our dashboard gives you a top-line view of the expenses of your employees, which makes understanding company expenditure easy and also allows you to see how spend is conducted across the entire business. It also means that reconciling expense reports is a simplified process for your finance team.

Rewards that matter

One of the common advantages across credit cards of all types is access to a rewards hub. However, while consumer-facing credit cards often reward customers with experiences and cashback, business credit cards often bundle existing products from that particular financial institution into their rewards package.

Rewards are rarely the deciding factor for a business to choose a business credit card, that’s a common reason why they rarely get a lot of love from lenders. We disagree. Rewards can be used to connect your business to the software, services, and tools that you need to get ahead. So that’s what we did. Using Cape, your rewards can be used to gain discounts on the things you already use, saving your business money immediately while our forecasting tools save you money in the long run.