Corporate prepaid credit and debit cards offer a new approach to managing day-to-day employee spending that, until now, was available only to the largest corporations. Unlike standard business credit cards, a prepaid expense card ensures employees never have direct access to the company’s business credit line.
Employers no longer need to worry about exceeding credit limits or getting hit with late fees or interest charges.
Franchisees across a wide variety of industries across the globe are implementing prepaid expense cards to streamline their business expenses. Here are four more reasons to consider a corporate prepaid expense card program for franchise businesses.
1. Prepaid expense cards are less limiting than credit cards.
Standard business credit card lines are limited by what a bank is willing to lend, and they don’t necessarily change when your franchise’s needs and profits change. With a prepaid business expense card service, companies take control of their spending availability by funding their repository account with an adequate amount of money; the bank has no say in what a company is allowed to spend. As your franchise expands or contracts, you decide how much money is available for expenses and never risk that employees will be turned down because of a bank-assigned limit. Prepaid expense cards also protect businesses from credit card firms that have been known to cut credit lines with little or no advance notice, causing embarrassment and operational issues for companies, their staff, and current and/or potential clients.
2. Prepaid expense card programs help businesses cut down on fees.
Franchise owners are progressively rethinking how to thrive in today’s economy with limited credit histories and mobile work forces. Companies can more efficiently manage their spending and allocate funds appropriately because corporate prepaid debit cards eliminate the burden of interest charges, over limit fees, and late fees.
3. Prepaid expense cards do not require a credit check.
Prepaid business debit card providers never order a credit report - not on you, your employees, or your business. Standard business credit card companies usually require a personal co-signer for the debt and order credit reports on that person and the company. There’s no reason to do so with a prepaid business debit card. After all, it’s your money. Why would the provider need to know your credit history?
4. Prepaid expense card programs place no personal liability on the business owner.
There is no personal liability with a prepaid business expense card program because funds were provided to cover spending ahead of the purchase. With standard business card programs, the franchise owner or authorizing officer is held responsible for the company’s debt if the business is unable to pay.
In today’s business climate, the challenge to constantly and consistently “do more with less” is alive and well. All franchisees face critical financial challenges, including employee spending control, funds disbursement problems for remote employees, purchasing travel and job-related materials, and card abuse, as well as the misuse of corporate funds.
With centralized financial management and oversight, using a corporate prepaid expense card not only allows you to gain control over expenses, but also eradicates these financial challenges.
Toffer Grant is the CEO and founder of the PEX Visa Prepaid Card Service, a corporate prepaid card solution used to budget and track employee spending.