When filling out the “revenue” portion of a small-business credit card application, you want to make your small business or side hustle look its very best — without stretching the truth. But revenue can swing dramatically from year to year, and credit card applications often don’t spell out what you should or shouldn’t include when reporting it.
So what counts as an honest, just-the-facts answer? Generally, in credit card applications, issuers want to know your verifiable gross revenue from the previous year.
What to include
Revenue is the money your business brings in from sales, services or other activities. NerdWallet surveyed major small-business credit card issuers — American Express, Bank of America, Capital One, Chase, Citi and Discover — about what, exactly, should be reported as revenue on a small-business credit card application, and the answers were similar. The overall themes:
Applicants should report gross annual revenue — that is, revenue before taxes and other expenses are taken out. This is different from profit, which is revenue minus costs.
The figures should be from the previous year. Generally, that means you shouldn’t be reporting sales projections as revenue, although some issuers may be OK with that if your business is new.
It’s important to stick to the facts when reporting your business’ gross annual revenue, but don’t sell yourself short. Gross revenue can include several sources of business income.
“Typically, revenue comes from the sale of business products or services, the sale of surplus equipment or property, the sale of stock in the business and a variety of other sources, large and small,” Nikki Dolor, senior vice president and small business card underwriting executive at Bank of America, says via email.
An important note: You don’t have to have a registered business — say, a limited liability company or an S corporation — to report revenue on a small-business credit card application. You can also report revenue as a sole proprietor. You might be a sole proprietor, for example, if you: If you’re a sole proprietor, be sure to indicate this on your application when the issuer asks about your business’ legal structure. And in the field where you add your business tax ID, put your Social Security number instead.
What to leave out
When you’re reporting revenue on a small-business credit card application, it’s best if you don't include:
Revenue you can’t verify. Don’t report it if you can’t verify it. In some cases, issuers may ask you for paperwork to back up the numbers you reported, so it’s best to stick to what you can prove. Lying or including pie-in-the-sky predictions could cost you an approval.
Income that’s not business-related. It might sound obvious, but if you work a full-time job and sell items on eBay as a side hustle, for example, income from your full-time job shouldn’t be considered “revenue.” However, it can be included in the “income” field of the application.
Nerdy tip: Applications for small-business credit cards ask for information about both your business's finances and your personal finances. That's why they ask for personal "income" separately from business "revenue." Business cards require you to personally guarantee the debt on the card, so your personal finances will be considered in the approval process.
What if your business is new?
When your business is new, you might not have any revenue to speak of. And it’s OK to say that on your application.
In an email, Chase notes that applicants should report $0 in revenue if the business has no actual revenue. And Dan Arellano, vice president of small business cards at Capital One, says via email, “You should only report actual revenue that has been generated by the business on the application.”
Policies vary by issuer, but reporting a big goose egg for revenue doesn’t necessarily mean your application will be rejected.
“We require both income and revenue in our application,” Discover says via email. “For new businesses that don’t have revenue, we will rely on the income for decision-making.”
With some issuers, it could be OK to include sales projections here, too. When businesses are new, “generally, clients will report projected revenue based on their business plan, projected sales and potential contracts,” Dolor of Bank of America says.
Just be sure to keep those supporting documents handy, in case the issuer follows up with any questions.
The specifics: What major issuers said
NerdWallet asked the major small-business credit card issuers what should be included and excluded from revenue reported on credit card applications. Here’s how each issuer responded.
American Express: American Express asks for “Annual Business Revenue” on its small-business credit card applications. This issuer declined to provide more detail.
Bank of America: “For credit requests, clients typically report last year’s sales when providing gross annual sales figures,” Dolor of Bank of America says.
Capital One: “For [the revenue] section, business owners should include the gross revenue collected by the business over the past year,” Arellano of Capital One says. “Applicants should not include any revenue [or] income streams that are not directly tied to the business on the application.”
Chase: The revenue you report on your credit card application should be “what you last reported for your business revenue before any expenses or taxes,” according to an email from Chase.
Citi: Citi asks for “Annual Business Revenue” on its small-business credit card applications. The issuer didn’t provide further detail.
Discover: “Applicants should include the latest available annual revenue that can be verified,” according to an email from Discover. The issuer notes that applicants shouldn’t include anything that isn’t business-related.
This article was written by NerdWallet and was originally published by Forbes.