The introduction of corporate credit cards in India has made significant waves and changes in the business financial ecosystem. It has changed the way businesses used to operate and made the system more efficient and optimized. Earlier employees had to go through lengthy processes like collecting receipts, sending emails, and obtaining approvals to get their business expenses reimbursed which was not only a hassle in itself but also consumed a lot of employee energy and time. Now with the help of corporate credit cards businesses can easily speed up their reimbursement processes by assigning these cards to their employees for any business-related expense. 

But obtaining a corporate credit card is not easy, your business must fulfill certain requirements to be eligible for the same. Now, many businesses are still unaware of these requirements making them unable to obtain these cards. So, in this blog, we are going to learn all about what are the requirements to be eligible, and how a business can apply for and obtain a corporate credit card.

But before we go in-depth, let’s first understand the corporate credit card meaning and how it is different from a normal credit card.

What is a Corporate Credit Card?

A corporate credit card meaning is a credit card issued by a bank to a company but provided to specific employees for work-related purchases. Unlike a regular credit card, the company, not the individual employee, is legally responsible for repaying the balance.

Here’s a breakdown of how corporate credit cards work:

• Issued to Employees: Companies distribute corporate cards to authorized employees who need to make business purchases, like travel, meals with clients, or office supplies
• Company Liability: The company is on the hook for repaying the card balance, not the individual employee
• Benefits for Employees: Employees don’t have to use their own money upfront for business expenses and wait for reimbursement
• Benefits for Companies: Companies gain better expense tracking, control over spending through spending limits, and potentially rewards programs that can benefit the business

Eligibility Criteria to Get a Corporate Credit Card in India

When it comes to getting credit from banks in any way, there are certain requirements and eligibility boxes that need to be checked for your application to be considered and accepted by the banks, and they are very strict/rigid about the same. These criteria can be classified into two categories: Company and Individual (Applicant) eligibility.

For the Company:

• Business Type: 

Most banks offer corporate credit cards to various business entities, including:

• Registered Companies
• Limited Liability Partnerships (LLPs)
• Sole Proprietorships
• Partnership Firms
• Trusts (in some cases)
• Government bodies
• Non-profit organizations (with limitations)

• Business Age: 

Many banks require the company to be operational for a minimum period as the longer the business operates the more beneficial it’ll be for the bank. This can range from one year to two years or more, depending on the bank and card tier.

• Turnover: 

To provide a corporate credit card, banks require you to show that your business has growth potential by showing revenue and profit numbers. The growth trajectory of the business should be in an upward direction, to show the same businesses have to submit documents like bank statements, and company financial reports

Banks often set a minimum annual turnover requirement. This can vary significantly depending on the bank and the credit limit you require, typically starting from around Rs. 10 crore and going higher for premium cards.

• Credit Score: 

A good business credit score establishes trust and portrays your borrowing and repayment habits. The higher your credit score is, the more likely you are to get corporate credit cards with your required credit limit from any of your desired banks.

Individual (Applicant) Eligibility:

• Citizenship and Age: 

The applicant must be a resident Indian citizen, usually between 21 and 70 years old.

• Designation: 

Typically, the applicant should hold a senior position within the company, such as Director, CEO, CFO, or authorized signatory.

• Creditworthiness: 

While corporate cards are not based solely on the applicant’s credit score, a good credit history can strengthen the application.

Documents Required to Apply for Corporate Credit Cards in India

Getting a company credit card in India requires gathering a specific set of documents to prove your business’s legitimacy and the applicant’s authority. Here’s a list of the documents that are absolutely required by the bank. This list of required documents may extend depending on your bank’s specific requirements.

• Basic Documents: You might have to submit your company’s basic documents like Company Registration/Incorporation Certificate, Memorandum of Association (MOA), Articles of Association (AOA), and Partnership Deed (if applicable and depending on the bank) All these documents serve as the primary proof of your business being a legally registered entity
• GST Certificate and Number: A valid GST certificate and number are mandatory for tax-paying businesses in India. If you do not have this GST certificate, then don’t worry it can be easily downloaded and obtained from the official GST portal. You can also read our detailed guide on how to search GST numbers to understand the process
• CIN (Company Identification Number): The CIN or Corporate Identification Number is a unique number assigned to your business during registration, this serves as an identification code for your company
• Proof of Business Address: This can be a rental agreement, utility bill (electricity, water), property tax receipt, or ownership documents for the business premises
• Latest Bank Statements (3-6 months): Banks use these to assess your company’s financial health and spending patterns

Points to Remember:

• Different banks have different requirements, so it is best advised to consult with your bank about all the required documents beforehand 
• Ensure all documents are clear, legible copies and not originals
• Some banks might accept soft copies submitted online, while others might require physical copies submitted at a branch
• To avoid losing any important documents at the last moment, it is best if you maintain an organized online or offline folder for easy access

How To Apply for a Corporate Card? 

• Visit the bank’s website or branch to initiate the application process
• Fill in your basic details like name, number, and email ID as directed on the website or in the branch
• A bank representative will contact you to discuss your application, plan fees, and credit limit
• You will also need to fill out some forms and gather some documents. Once everything is arranged, submit all this paperwork electronically or physically, depending on the bank’s instructions
• The bank will review your application and make a decision based on your company’s financial health and creditworthiness
• The approval process can take several days or sometimes even weeks so be patient and take constant updates on the same

Points to Keep in Mind When Applying for a Corporate Card

Credit Limit: Carefully evaluate your business credit limit needs and apply for the same. While opting for a higher credit limit than needed might seem appealing because let’s be honest who doesn’t like some extra cash, it can negatively impact your approval chances and lead to unnecessary interest charges. So be very careful while considering how much credit your business will realistically require.

Spending Categories: Before applying for a corporate credit card you should also check your business spending habits and in which category most of your expenses generally occur so that choosing a corporate card solution that best aligns with your spending habits is easy. For example, if your employees travel frequently, a card with travel rewards might be ideal.

Number of Cards: Determine how many cards your company needs and who will be authorized users. Make sure to assign these cards only to those employees who have a legitimate business purpose for using the card.

Annual Fees: You should also keep in mind that you can be charged yearly fees by some card providers so you must compare the annual fee against the potential rewards and benefits offered by the card to ensure that you get a good deal.

Rewards Programs: Choose a corporate card solution with a flexible rewards program. So that even if your business expenses are more, with every expense you can get some cashback reward. 

Additional Benefits: Consider perks like airport lounge access, purchase protection, or extended warranty coverage that might be valuable for your business.

Negotiate: The key to getting good deals always comes down to the ability to negotiate better terms and conditions. So don’t be afraid to negotiate terms like interest rates or annual fees, especially if your business has a strong financial profile because then you have the upper hand and might easily secure a fair bargain. 

Read the Fine Print: It is always advised that you should do your own research before entering into any sort of commitment, and so even in this case, before applying, thoroughly review the card’s terms and conditions to understand any potential charges or limitations. 

Advantages of Corporate Credit Cards

Corporate credit cards offer a multitude of advantages for both businesses and employees. Here’s how:

• Expense Tracking & Management: Corporate cards provide detailed transaction records, eliminating the need for employees to collect and submit paper receipts. This simplifies expense reporting, allowing companies to easily categorize and track business spending
• Spending Control: Companies can set spending limits for individual cards and categories, preventing unauthorized or excessive expenditures. This fosters better financial discipline and reduces the risk of fraud
• Reimbursement Process: Employees don’t need to use their personal funds and wait for reimbursements. Corporate cards eliminate the need for expense reports and expedite the reimbursement process, saving companies time and resources
• Rewards and Cashback: Many corporate cards offer reward programs that allow businesses to earn points or cashback on business purchases. These rewards can be redeemed for travel, office supplies, or other business-related expenses, effectively reducing overall costs
• Building Business Credit: Responsible use of corporate credit cards can help establish a positive business credit history. This credit history will be beneficial for the business in the long run when applying for loans or other forms of credit in the future

How Can EnKash Help?

EnKash’s DIY corporate cards solution is designed to address the financial management needs of businesses through innovative features like:

• Virtual and Physical Cards: Businesses can choose between virtual cards for online transactions and physical cards for in-person purchases, providing flexibility in managing expenses
• Custom Spend Controls: EnKash allows companies to set specific spending limits and category restrictions on each card, ensuring tighter control over expenses
• Real-Time Tracking: The platform provides real-time tracking of all transactions made using corporate cards, allowing businesses to monitor spending instantly
• Automated Expense Reports: EnKash automatically generates detailed expense reports, eliminating the need for manual entry and reducing administrative workload
• Effortless Reconciliation: Integration with accounting systems simplifies the reconciliation process, reducing errors and saving time
• Secure Transactions: EnKash employs robust security measures like end-to-end encryption to ensure that all transactions are conducted in a secure way protecting sensitive financial information
• Flexible Card Issuance: Easily issue additional cards as your team grows, ensuring that new employees have the tools they need for business expenses

Conclusion

Corporate credit cards have become a valuable tool for businesses in India, streamlining expense management and offering a range of benefits. By understanding the eligibility criteria, application process, and key considerations, you can choose a corporate card solution that best suits your company’s needs.