Updated
Feb 28, 2022 Some offers mentioned on this page may be outdated. To confirm offers and credit card details, check the issuer’s website.
If you are like many business owners, you may need access to fast, flexible financing for, say, an inventory purchase or covering travel for employees.
Sometimes cash flow is not enough to cover crucial expenses, so many companies rely on the best business credit cards for these short-term capital needs. However, some business cards, particularly for small businesses, require extra security through personal guarantee
Many business owners don’t want to commit to a personal guarantee, which would impact their own finances. So, they prefer business credit cards without personal guarantee.
Here’s what you need to know about business credit cards with no personal guarantees.
Business Credit Cards and a Personal Guarantee
A personal guarantee is simply a promise to repay any outstanding balance personally if the business is unable to. To the card issuer, it does not matter if your business is an LLC, a sole proprietorship, a C-corp, or an S-corp. With a personal guarantee, the lender has the right to pursue the business owner – and their personal assets – to repay the balance if the business is insolvent or fails to pay on-time and in full.
Most credit card issuers put a personal guarantee in the fine print of a new business credit card agreement to help protect their losses. While not on every business credit card, personal gaurantees are quite common, especially for small business owners with either a short time in operation or minimal business assets.
How to Get a Business Credit Card With No Personal Guarantee
Getting a business credit card without personal guarantee is not easy, but it’s possible. The first option is to lean on your long-term relationship with the bank, if you have one. You may have an option to negotiate out of a personal guarantee requirement if you have strong business financials, a low debt obligation, and solid payment history. Secondly, you may also have the option to meet minimum size and revenue requirements to avoid a personal guarantee.
When these options are not feasible, searching for a business credit card without personal guarantee requirements is your next step.
The best place to start in this search is with corporate credit card issuers, like American Express, which offers several variations of corporate credit cards for businesses based on annual revenue and number of cardholders.
The best corporate credit cards will not impact your personal credit, but they are difficult to qualify for without revenue above $1 million each year. If you are eligible for a corporate credit card tied to your business and not your personal assets, explore your options for rewards, travel benefits, and flexible payment options.
Alternatives to No Guarantee Business Cards
If you cannot secure a business credit card without personal guarantee, here are a few options for business credit cards with one:
- The Blue Business Plus Credit Card from American Express – A flat-rate-rewards business credit card with no annual fee that offers a 0% APR on purchases and balance transfers for an introductory period, followed by an APR of 15.49% – 21.49% variable. Cardmembers must have a minimum credit score of 640 to qualify.
- Capital One Spark Cash Select for Business – A business credit card with no annual fee that offers an introductory 0% APR on purchases to new cardmembers, followed by an APR of 15.24% to 23.24% variable APR. Business owners must have good to excellent credit to qualify.
Final Thoughts on Business Credit Cards Without Personal Guarantee
Small business owners may not be able to avoid personal guarantees on business credit cards, especially if they do not meet the revenue or business asset requirements or do not have a strong relationship with their card issuer.
There are a few strategies that can help, including flexible business credit cards that offer benefits and features that suit their rewards and spending needs.