As you are aware, business credit card loans are unsecured, and hence every bank/lender would want you to be the personal guarantor to ensure they can recover the debt in case you are unable to pay back. Hence it is hard to find any business credit card that doesn’t require a personal guarantor.
What is a business credit card with a personal guarantee and how to get business credit with no personal guarantee?
By agreeing to be a personal guarantor, it means that you take personal responsibility to pay off the loan amount if your business fails to do so. When a lender lends you money, they need a way to mitigate the risk of non-payment of the loan. By signing off a personal guarantor, the risk is mitigated. Although even if it seems to be impossible to get business credit without a personal guarantor, you can still secure the same. There are two ways to do so – make use of your relationship with the bank and meet the size and revenue requirements. In the next section of this article, we will look deep into this aspect.
1. If you have a good payment history and can show good business financially, a low debt to credit ration, then you have a fair chance to negotiate the personal guarantee with your bank. Some banks may also waive off the personal guarantee once you have the business credit for some time and have built a good credit score. In a nutshell, you need to improve credit so that the bank trust you to waive off the personal guarantee.
2. If you are a fairly large business with a consistent revenue of $1 million or more, the bank might waive off the personal guarantee. However, you need to be in business for some years to prove your credentials.
However, there are other alternatives to receive a business credit with no personal guarantee. But the catch is, most of these business credit cards are not issued by banks – they are issued by stores which means you can spend only in limited places or on limited products.
Some of the top business cred card alternatives (with no personal guarantee) that we like:
1. Sam’s Club Business Credit: If you are a member of Sam’s Club, you are eligible to get a Sam’s Club Business credit that offers some lucrative rewards like 5% cash back on eligible gas worldwide, 3% cashback on dining, and 1% cashback on travel. You can earn reward points that you can redeem to purchase Sam’s Club.
2. Shell Small Business Card: If your business involves managing a fleet of drivers, this card can be handy for you. It has no monthly recurring fees and you can avail additional cards for your employees too.
Here are some more business credit cards with no personal credit scores! Our top picks include:
Bank of America® Business Advantage Travel Rewards World Mastercard®
• They offer you 25,000 points sign-up bonus if you spend $1,000 in first 60 days along with 3 points on travel when booked through their portal
Capital One® Spark® Cash for Business
• You can earn an unlimited 2% cash back on every purchase with no cap
• In addition to that, you can also earn up to $500 as a signup bonus if you spend $4,500 in the first 3 months
American Express Blue Business Plus
• The best thing we liked about this card is 12 months of 0% intro APR period is one of the very few intros APR periods that apply to both purchases and balance transfers
• 2X points for the first $50K spent
Chase Ink Business Cash
• They offer a $500 signup bonus if you spend $3K in first 3 months
• It also has 0% intro APR for 12 months on purchases
The bottom line: It is difficult to get a business credit card with no personal guarantee for obvious reasons. It may become harder for you if you are a small business owner. Having said that, there are always cool alternative ways to get a business credit that will not affect your credit score or have a minimal effect. Meanwhile, you can earn some great rewards and reward points. All you need to do is, do thorough research and gather enough information that can help you make an informed decision.