Prepaid Cards: A Welcome Boost for Small Businesses
Wednesday, 9 March 2011
At a time when many small businesses are struggling, can provide some much needed support for business owners. Prepaid cards simplify the task of managing your money, making it faster and easier. This article will highlight why a prepaid card is not only a more convenient way to control your funds but also a safe way to handle your money.
Over the course of the last year, the number of UK businesses has declined significantly, according to the Office for National Statistics. Furthermore, the Federation of Small Businesses argue that as 97 per cent of businesses in the UK employ fewer than 20 people (meaning that they are classed as small businesses), the drop in the number of companies is likely to hit small businesses hardest.
Prepaid cards are a great resource for anyone hoping to buck this trend and set up their own business. They are useful because it is often difficult for individuals to acquire a business bank account. When setting up a business account you will have to undergo various checks including credit checks, something that can be difficult to pass if you are setting up your first business. As a prepaid card does not need to have any links to existing bank accounts, people who are setting up a small business don't need to use their personal accounts as a basis for a business related account. This means that both financial arrangements can remain separate.
With a prepaid card, however, there are no such conditions and acceptance is guaranteed. This is because you are not applying for credit. However, you will have to prove your identity and address but as long as you can do this a prepaid card can be yours in a matter of days.
Essentially, you 'top-up' prepaid cards by transferring money onto them. You can then use the card just as you would a normal cash or credit card; however, once the money is spent you cannot go into debt. Cashplus, one of the UK's leading prepaid cards, can be topped up with money at Money Shop and other retail locations nationwide for free or via free bank transfers.
Once you have your card you can use it for anything from managing petty cash to paying suppliers. With the Cashplus prepaid card you can even receive payments as each card has its own sort code and account number. Receiving your money can be quick and easy; assuming that the payment to the card is made from a bank that uses the Faster Payments service before 15:30, you will receive the money the same day.
Another way in which many business owners use prepaid cards is as corporate expense cards. Up to 99 additional cards can be added to a single Cashplus account, meaning that you can distribute them to multiple employees. Using prepaid cards in this way allows you to easily keep track of the expenses that are being charged to your company (most card companies provide 24-7 Internet access) and avoid over charging; you can even have your company name added to the card.
Anyone can apply for prepaid cards, from sole traders to limited companies. They reduce the burden on small businesses associated with business bank accounts and offer a flexible alternative to traditional credit and debit cards.
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