A guide to business credit card limits

Your credit limit is the maximum amount of credit you have on your card. For business credit cards, the credit limit can vary depending on the issuer, the financial stability of your business and your personal creditworthiness.

Personal credit cards have limits based on your individual income and credit score. But business credit card limits are more complex. They can be much higher because they consider your business’s financial strength and sometimes even the business owner’s personal credit history.

It’s difficult to determine the maximum credit limit in Canada, as most credit providers don’t share this information. However, some cardholders report limits over $50,000 or even $100,000. In rarer cases, credit limits can reach up to $500,000.¹

1) Business financials

It’s important for card issuers to determine your business’s financial health when setting your credit limit. This assessment can be based either on personal liability or business liability. If it’s based on personal liability, then the card issuer will focus on your personal income and credit score. If it’s based on business liability, then the card issuer will assess the company’s revenue, profitability, cash flow and credit history. Higher revenue and strong cash flow may demonstrate that your business is likely to repay its debt, which could lead to a higher credit limit.

2) Personal credit score

If you’re applying for a personal liability business credit card, your personal credit score is essential in determining your credit limit. Banks assess your credit history, which shows how reliably you’ve handled debt in the past. If your credit score is strong, your limit may be higher.

3) Business age and industry

The age of your business also matters. Established businesses are generally seen as lower risk, as they could demonstrate a proven track record, whereas startups may face lower initial limits.

Industry may play a part, too. Due to economic fluctuations, more volatile industries like construction or retail may receive lower credit limits. On the other hand, a tech consulting firm with a steady stream of contracts may be granted a higher limit, given the lower operational risks and consistent revenue potential.

4) Existing debt and credit utilization

High levels of debt could signal a potential risk to lenders, as it could indicate that your business might struggle to repay additional debt.

Credit utilization — the percentage of credit in use compared to the total available credit — is another key factor. Businesses that keep their credit utilization low are viewed as more financially stable, which could lead to higher credit limits over time. You should aim to have a credit utilization ratio of 30% or less.²

Some card issuers periodically review accounts and may automatically increase your limit based on positive spending behavior and a consistent payment record.

For others, especially cards based on business liability, you may need to request a limit increase and provide additional financial documentation to demonstrate growth and improved financial stability.

1) Improve your business’s financial health

Improving your business's financial health is one of the best ways to qualify for a higher credit limit.

Here are some effective tips:

• Work to increase revenue: Focus on strategies that drive more sales and improve cash flow.
• Maintain positive cash flow: Signal to lenders that your business can reliably handle debt by maintaining a consistent, positive cash flow.
• Strengthen your credit score: Pay your business debts on time to demonstrate to lenders that your business is financially reliable.
• Avoid over-utilization: Keep credit utilization low by using only a portion of your available limit.

2) Provide updated financial information

It's also a good idea to keep your financial information current with the credit card issuer. Just like updating your income on a personal card could lead to an increased limit, regularly updating your business's financial records may help your case.

If you opened the card when your business was just starting, the issuer might not be aware of your growth and success. Providing up-to-date financial statements shows that your business has grown and can handle a higher limit responsibly.

3) Request a credit limit increase

If your credit card issuer hasn't automatically increased your limit, you could request a higher credit limit yourself.

Here's how to approach the process effectively:

• Organize your financial records: Start by gathering recent financial statements, including profit and loss statements, balance sheets, cash flow reports and any other documentation that shows an increase in revenue or financial stability.
• Prepare a clear business case: Beyond the numbers, be ready to discuss your business's growth and financial outlook. Explain why your business needs a higher limit — whether it's for managing larger orders, covering seasonal expenses or supporting expansion efforts.
• Check specific requirements from your issuer: Some credit card issuers may have different procedures for business liability accounts versus personal liability accounts. You may need to submit additional documents, such as recent tax returns, to support the increase.
• Demonstrate good payment history and responsible credit use: A strong track record could increase your chances of approval.
• Follow up on the request: Once you've submitted your documents, follow up with your issuer if you don't hear back within a reasonable time frame. Some banks and issuers may need a few weeks to review the request, especially if you provided detailed financial records.

It’s important to understand and manage your business credit card limit so your business finances stay on track. By actively managing your limit, you can help ensure that your business maintains a healthy cash flow and stays prepared for unexpected expenses. Business credit cards have powerful benefits, but it’s important to choose a card that aligns with your business’s financial profile and goals. Learn more about CIBC business credit cards.