When needed, a secured business credit card is a great way for a business to re-establish itself as a good credit risk. It is the way to do it by showing the financial industry that the company in question is willing to do what is necessary to increase its creditworthiness.

Like all secured lines of credit, a secured business credit card is not a line of credit but is drawn from a deposit made by the account holder. This is done to show that a business is serious about maintaining a good credit rating and being a good credit risk.

There are many financial institutions willing to extend this type of account to a business in need. The motivating factor is profit. Even if the company is considered a high risk account holder; the risk is reduced due to the deposit made. The secured business credit card has a spending limit that is equal to the amount deposited.

There are three main reasons why a company is willing to do this for business. The deposit, the income from purchases and the management of the account is where the company makes its profit. The deposit is invested as the credit card company sees fit and all interest goes into your pocket. For each purchase made with the credit card, the company charges 2%. Lastly, the company charges fees for the guaranteed business that typically include a monthly service fee, an annual fee, and interest only on the revolving balance that is not paid each month.

But it’s a great way for any business with bad credit to be re-established as a good credit risk in less than a year with all payments made on time.