Best Business Credit Cards With No Personal Guarantee

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In this article, We are sharing all the information about Best Business Credit Cards With No Personal Guarantee.

Credit cards for businesses are indispensable financing tools for new ventures. This type of card offers benefits like points and rewards for business owners who need a steady, flexible source of cash. 

A business credit card with no credit history or a bad credit score can make you a higher-risk borrower if you’re trying to obtain the best business credit cards. A credit card issuer will probably require you to provide a personal guarantee when applying for a business credit card – this means a copy of your personal credit card if the business is new and has no credit history.

The personal guarantee is essentially a statement from the business owner stating that in the event the business cannot pay back the business credit card balance, you are personally responsible.

What is a Personal Guarantee?

The personal guarantee means that you are personally responsible for any payments that your business doesn’t make. If the business defaults on payments, the credit card company has the right to pursue the person who accepted the guarantee for payment.

As business credit cards are unsecured credit cards, you don’t need to provide any collateral when you apply for one, so it’s very common for a personal guarantee to be required. When a business signs up for a credit card, a credit card issuer mitigates its risks if the business fails or cannot repay its debts.

The business guarantee, however, protects the business from liability for unpaid credit card bills. It is common for companies to use a business guarantee when providing employee credit cards.

Do Business Credit Cards Require a Personal Guarantee?

New business owners are usually required to give a personal guarantee before they can open a credit card account. If your business is not already established, you will need a higher business credit score to qualify for credit cards without a personal guarantee.

Despite this, some business credit cards don’t require a personal guarantee or established business credit. The underwriting of your corporate card, for example, relies on the monthly sales data you provide. The credit limit on business cards may be higher than that on typical credit cards if your business generates enough revenue.

What are Business Credit Cards With No Personal Guarantee?

Some business credit cards do not require personal guarantees, but there are some that do. It is possible that these cards come with other restrictions or requirements instead. You may not be able to carry a balance with some cards, and your total charges will be deducted from your bank account.

A business that wants to apply for a business credit card that does not require personal guarantees is usually at least two years old, with at least several million dollars in annual sales. Credit cards without personal guarantees are generally easier to obtain for businesses with significant revenue and high cash reserves.

Business credit card applications without personal guarantees usually require documentation such as a business license, credit history, and income tax return.

What Is a Personal Guarantee on a Business Credit Card?

A business owner’s personal assets and liabilities are separate from their business assets and liabilities in many credit card applications, especially those that have been submitted after the business has been properly registered.

A business owner can protect his or her personal property when the business fails by doing this. Business owners who give personal guarantees to credit card companies or lenders agree that their personal assets and credit will be available for collection if they cannot or don’t pay the company’s bills.

Best Business Credit Cards With No Personal Guarantee

It is possible to apply for a business credit card without giving a personal guarantee. These cards aren’t traditional business cards, but your business may be able to qualify for them without a personal guarantee. Many of these cards also offer spending rewards and expense management tools. Here are your five best options.

Brex Corporate Card

While Brex’s Corporate Card for Startups has some steep requirements, no personal guarantee is required. This credit card offers rewards for a wide range of purchases, including ridesharing, dining, and travel. If you wish to qualify, your company must either hold over $500,000 in cash in a business account, have a revenue of over $1 million annually, have 50 or more employees, have a referral, or receive equity investment from angel investors, VCs, accelerators, or web3 token investors.

The dynamic credit limits Brex offers are based on the finances of your company, so the company has higher credit limits as well. The charge card cannot be resolved, as it is a charge card. To avoid getting charged penalties or having your credit card frozen or closed, only spend what you can afford to pay back each month.

SVB Innovators Card

The Silicon Valley Bank (SVB) Innovators Card is offered by First Citizens Bank to early-stage companies. SVB business banking account holders are eligible for the card. There are no annual fees or charges for distributing cards to your employees, and you don’t need a personal guarantee.

You should also remember that this is a charge card, not a credit card. Since you won’t be revolving any debt, you will not be subject to interest charges or APRs, but you must pay the balance in full by the due date. A business rewards program is also included with the SVB Innovators Card. Every dollar spent earns you 2X points, which can be redeemed for statement credits.

Sam’s Club Business Mastercard

A Sam’s Club Business Mastercard provides businesses with valuable rewards and benefits without requiring a personal guarantee because it is worded in paragraphs instead of bullet points. Mastercard’s Sam’s Club, fuel station, and restaurant card offers 2% cash back on all purchases and 1% cash back on everything else. The first year is also free. It is only necessary for businesses to have a valid company ID or EIN and a generally good credit standing to qualify. There is no need to check your credit or provide a guarantee.

A business can earn 2% cash back at Sam’s Club, on gas, and at restaurants after securing a card and spending $2,000 in a month. Thereafter, all purchases will receive 1% cash back. If businesses frequently spend in these categories using the card, the cashback is of significant value and offers ongoing value over time. The cashback has no expiration date or limit and can be used at any time as a statement credit, deposit, or gift card.

Office Depot OfficeMax Business Credit Card

The Office Depot OfficeMax Business Credit Card offers valuable rewards for businesses that frequent Office Depot or OfficeMax locations. It does not require personal guarantees and uses well-written paragraphs instead of bulleted lists.

This Citi card offers 5% rewards on spending up to $2,000 monthly, plus 3% on copy and print and 1% on everything else. Businesses must have a valid business tax identification number and generally good financial standing to qualify. It is not necessary to run a credit check or provide a guarantee.

A business that spends $2,000 at Office Depot monthly can earn 5% rewards (which equates to $0.05 back per $1 spent). This category includes both in-store and online purchases, and it includes everything from office supplies and copy/print services to furniture and technology. Upon spending $2,000 in rewards-eligible purchases, the rate is reduced to 3.5% for copy and print services, printing, binding, laminating, shipping, and 1% for everything else.

Ramp Corporate Card

A Ramp Corporate Credit Card does not require a personal guarantee or credit check and does not have fees associated with it, such as annual or foreign transaction fees. Virtual and physical cards can be locked in real time and monitored and controlled at any time.

Using the Ramp Corporate Card, business owners won’t have to worry about keeping track of bonus categories or meeting certain requirements to earn rewards. It earns a flat 1.5 percent cash back on all purchases.

How to Qualify for Business Credit Cards with No Personal Guarantee?

Business Credit Cards with No Personal Guarantee are generally available to well-established companies with an EIN. The reason for this is that these types of cards are usually issued to corporations. Since corporate cards are issued to companies rather than individuals, personal guarantees are generally not required.

Thus, they are designed for small-business owners who might be individuals or sole proprietors, not for incorporated businesses, like LLCs, S corporations, and C corporations.

There are other ways in which a business card issuer can protect its interests besides requiring personal guarantees. A bank account may need to be opened with the bank or linked to your card, and a certain amount of money must be kept in the account.

A business card’s line of credit is backed by the cash in the account, although it is not technically a security deposit. You may also have to show that your business is profitable and is generating high revenue streams every month or every year.

Requirements for Business Credit Cards with No Personal Guarantee?

The card options listed below don’t require a personal guarantee if you don’t want to risk your financial stability. There are, however, some credit cards that are notoriously difficult for business owners to access, so make sure you meet all requirements before applying.

The following are the types of credit cards that most lenders offer without a personal guarantee:

• An Established Business:A well-established business will likely need articles of incorporation demonstrating that it has been operating for three years or more.
•  Good Business Credit:You will need to demonstrate your business has a positive credit history -like a history of responsibly using a business credit card with a personal guarantee or an on-time payment history on a business loan.
•  Deposit Account. You are required to open a deposit account with the lender and maintain a minimum balance. Similar to a personal credit card with a security deposit, a deposit account is usually linked to a credit card.
•  Revenue and profitability: It may be necessary for you to demonstrate that your business generates substantial profits each year.

How to Apply For Business Credit Cards With No Personal Guarantee?

The application process for business credit cards that don’t require a personal guarantee is nearly identical to that for any other type of business card. Your business will still need to provide basic financial information, like revenue expectations, assets, and liabilities. After you submit your initial application, the card issuer may require follow-up information, and the approval conditions may be more stringent.

Pros and Cons of Business Credit Cards With No Personal Guarantee

Even though cards without a personal guarantee requirement reduce risk, they are often associated with many disadvantages and high costs.

Pros of Business Credit Cards With No Personal Guarantee

There are many benefits to using a business credit card, but one that does not require a personal guarantee means that it won’t necessarily make you personally liable for the debts the business incurs. The risk associated with financing purchases or transacting with the card lessens with these cards, but it is not necessarily eliminated.

Cons of Business Credit Cards With No Personal Guarantee

Even though minimizing risk is always important, taking risks with cards without personal guarantees may make sense based on their disadvantages. There are a limited number of options, for starters. The lenders will want you to have some stake in the business rather than assume all the risks.

Credit card companies will be less inclined to offer you a card with exceptional rewards, benefits, and other benefits if your business doesn’t meet their requirements. Additionally, business credit cards that don’t risk your personal credit and finances may come with higher APRs or other fees.

How To Pick a Business Credit Card With No Personal Guarantee Requirement

Your business may have difficulty finding a credit card that suits its needs. Make sure you carefully consider your options before applying. The following points should be taken into account:

• Check For Fees: Be sure to read the fine print to avoid hidden fees. Some companies charge application fees, annual fees, and even monthly maintenance fees. This list of cards is mostly free of fees, which contributed a lot to our high rating.
•  Build Your Credit Before Looking for a Card without a Personal Guarantee: If you improve your credit before applying, a business credit card is often more advantageous. The options for building credit with a personally secured credit card are increasing (and getting better). You can earn better rewards and score better perks after building your credit with the best business credit cards.
•  Analyze the Costs and Rewards of Benefits: The promise of high-rate rewards and shiny perks is appealing, but will your business actually take advantage of them? The only card you might want if you don’t need office supplies is one that rewards you primarily for purchases of office supplies. Travel benefits probably aren’t necessary if you don’t travel. If you suspect you’ll need the benefits one day (when you won’t), don’t take on more risk than you need.

How to Minimize Personal Liability with Business Credit Cards With No Personal Guarantee

Business credit cards with no personal guarantees minimize your personal responsibility for your business’s debts. If you’re not eligible for one, you must comply with a personal liability clause, which varies depending on the type of card you have:

• Limited liability: A dollar limit can be collected by the issuer.
•  Unlimited liability: The issuer is able to recover all the money due, including financing and legal costs.

A limited personal guarantee may offer some level of protection if you are looking for a business credit card rather than an unlimited one. If you already have a business card, it is important to define the type of liability clause related to your personal guarantee in your contract.

It is also possible to minimize the amount you would be responsible for by maintaining control over your account. Make sure you pay your bills on time and in full, halt all charges if you cannot cover the minimum payment request, and keep track of your balance frequently to avoid surprises.

Check the charges of your employees’ cards to see if they have them connected to the account. Take advantage of the features that issuers offer if they’re available, such as setting lower charging limits or locks for employee cards.

What Are the Restrictions and Limitations of Cards Without a Personal Guarantee?

The credit limits on business credit cards without a personal guarantee may be lower than those on business credit cards with a guarantee. An excellent business credit score is typically required for business credit cards without a personal guarantee.

There may also be fewer rewards programs and other benefits offered by cards with a personal guarantee. One of the most important reasons for using a business credit card is to reduce interest costs. Be sure to check out the specifics of the card before you sign up.

Some issuers may also require a certain minimum revenue level or industry-specific eligibility requirements. Business credit cards come in a variety of types. Ensure that you pay attention to all the details.

Are Business Credit Cards with No Personal Guarantee Worth It?

A business credit card without a personal guarantee may be attractive if you don’t want to be personally liable for any business debt. Your personal assets would be protected if the credit card company sued you for unpaid credit card debt.

The downsides are, however, numerous. Sole proprietors are typically not able to access business credit cards without personal guarantees, and meeting other requirements (like minimum account balances or revenue streams) can be difficult. Many business cards require a personal guarantee, and they usually come with fewer rewards and perks than other cards.

FAQs

Who Can Get a Business Credit Card with No Personal Guarantee?

There are many business credit cards available without a personal guarantee for large companies and smaller companies with large cash reserves and significant revenue. Business owners with these attributes are in a strong financial position to repay their credit card debt, which takes on the role of personal guarantees.

Is it Good to Have a Personal Guarantee Card?

When you’re a sole proprietor or owner of a small business, it’s hard to say no. Many charge cards without a personal guarantee are designed for corporations and businesses that meet certain requirements. If you cannot qualify for a business card without a personal guarantee, make sure you make all your payments on time and in full.

Do Banks Check Personal Credit for a Business Credit Card?

When you apply for a business credit card, the issuer performs a credit check. If you seek a secured business credit card, your credit history and score may not be considered for approval.

Why are Personal Guarantees on Business Credit Cards Necessary?

The credit card industry takes a risk when it issues cards to businesses. In the United States, 20% of new businesses fail within the first year, and only 34.7% survive to their 10th anniversary, according to the United States Department of Labor. Providing personal guarantees reduces the risk issuers take when extending your business credit.

How Do I Get Business Credit with Bad Personal Credit?

Applicants with low credit scores can approve business credit cards, but higher rates might apply. As an alternative, you may wish to consider secured credit cards, which help cardholders improve their credit before switching to unsecured credit.