In this article
- What Is a Personal Guarantee?
- This kind of business credit card is available to whom?
- Reasons for and Against No-Personal-Guarantee Cards
- The Greatest Business Cards with No Personal Guarantee
- Business Card for Brex
- Mastercard Stripe Corporate Card for Business Use at Sam’s Club
- How to Proceed If You Are Not Eligible
It’s a wise move if you’ve been considering getting a company credit card in order to keep your personal and professional costs separate. Whether you like it or not, getting approved for a business card will probably depend on your own financial situation. This is so that the cardholder is personally liable for the balance even though it is in their company’s name, as most business cards need a personal guarantee.
A few uncommon exceptions exist, nonetheless, such as business cards that lack a personal guarantee. Although they could be a wonderful way to increase the purchasing power of your company and safeguard your personal credit, no-personal guarantee Smaller firms may find it more difficult to obtain business credit cards due to the strict standards associated with them. To assist you in determining whether a company credit card would be a suitable fit for your needs, we’ve reviewed some of the top business credit cards that don’t require personal guarantees below.
A Personal Guarantee: What Is It?
A personal guarantee on a corporate credit card entails your liability for any amounts incurred, just like it would on a consumer credit card.
Take note
If you skip payments or go into default on your account, even though the card is in the name of the business, your personal credit standing could be jeopardized.
To reduce their risk, credit issuers need a personal guarantee, ensuring that in the event that the company experiences financial difficulties, there is an individual behind the scenes who has committed to repay the debt. A credit card that doesn’t need a personal guarantee might sound good to you as a business owner, but there aren’t many of them.
Without a personal guarantee, who can apply for a business credit card?
We were able to locate almost all business credit cards with stringent company requirements that did not require personal guarantees. Companies must demonstrate that they fulfill minimum revenue requirements, have a history of financial success, and/or maintain a specific level of cash reserves. Most entrepreneurs and small startup business owners with lower revenue may not be able to meet these requirements.
Benefits and Drawbacks of Corporate Credit Cards Without Personal Guarantees
Advantages
- independent of a person’s credit history
- Reporting to business credit agencies could aid in establishing business credit.
Disadvantages
- Not reachable for the majority of tiny companies
- restricted choices
Advantages Described
Unrelated to personal credit history: Many business owners can find it desirable to have a clear division between their personal and company funds. Additionally, this kind of business card might be available to entrepreneurs with weak personal credit.
Could submit information to business credit bureaus in order to establish business credit: Certain business card issuers report to the business credit bureaus, in the same way that consumer credit cards do to the major consumer credit bureaus on payment activity. Businesses can raise their company credit scores with the use of these reports. If this is your objective, before you apply, find out if the card issuer records payment activities.
Disadvantages
Not available to the majority of smaller firms: Small businesses frequently face more stringent credit qualification procedures due to the possibility that they pose a greater risk to lenders. Additionally, a company’s revenue and cash reserves are frequently taken into account when determining credit acceptance and restrictions.
Few options: There aren’t many cards available to you if you wish to avoid a personal guarantee. You won’t find the variety of rewards and benefit alternatives you would be accustomed to while looking for a standard business card, either, because there aren’t many possibilities accessible.
The Greatest Business Cards with No Personal Guarantee
Brex Business Card
Why We Made That Decision
Although tech companies are the target market for the Brex card, any US firm with a C-corp, S-corp, LLC, or LLP designation is eligible to apply. Although there is no personal guarantee, strong corporate financials are necessary for approval and lending limit.
Advantages
- Appreciate 8 points for every dollar spent on ridesharing, 5 points for hotels and flights reserved through Brex Travel, 4 points for dining out, 3 points for software subscriptions and some Apple items, and 1 point for all other purchases. This is an excellent rewards program.
- able to aid in establishing business credit Brex provides the two main business credit bureaus, Experian and Dun & Bradstreet, with your payment history.
- No fees: Neither an annual nor a foreign transaction charge are applicable.
Disadvantages
- Limited business eligibility: This card is not available for application by freelancers, sole owners, or other unregistered firms.
- Variable credit limits: Unlike other business cards, Brex credit limits are less stable because they are dependent on a company’s cash reserve balance. Your credit limit may decrease just when you need to rely on credit due to cash flow problems in your organization.
- No rotating balances are permitted. Since the Brex card is a charge card rather than a credit card, you must settle the balance in full every thirty days.
Sam’s Club business Mastercard
Why We Made That Decision
Another choice for those seeking a business card without a personal guarantee is the Sam’s Club Business Mastercard, which offers rewards on typical spending categories and has no yearly or foreign transaction fees. However, your business needs to be pretty significant in order to be eligible for a waived guarantee.
Advantages
Good rewards Get 5% back on gas, 3% back on eating and, if you’re a Plus member, purchases from Sam’s Club, and 1% back on all other purchases.
Able to maintain equilibrium: Businesses are permitted to hold a balance because this is a credit card and not a charge card. Just keep an eye out for the interest rate, which, depending on the sort of account you have, might range from 14.90% to 22.90%.
Disadvantages
Strict restrictions to avoid a personal guarantee: A personal guarantee is necessary if your company is a partnership or sole proprietorship, has less than 10 employees, is under two years old, or has fewer than $5 million in yearly sales.
No travel rewards: Despite the fact that this card has a few bonus categories, companies that spend a lot on travel are not eligible for any further benefits.
Membership at Sam’s Club is required. This card can only be applied for by those who have paid the annual membership fee.
Stripe Corporate Card
Why We Made That Decision
Should your company process payments using Stripe, you might be eligible to apply for the Stripe Corporate Card. There are no yearly, international transaction, or even late fees, and you’ll receive 1.5% back on all purchases. Additionally, you can include your company’s branding and emblem to personalize your card.
Advantages
Flat-rate cash back: 1.5% is a respectable return, especially for a company card without a personal guarantee, and the straightforward rewards structure eliminates the need to consider spending categories.
Positive partner benefits: Businesses that purchase a lot of software and online resources can save money on Slack, Hubspot, Google Ads, and other services.
No costs: There are no costs associated with the Stripe Corporate Card, not even for extra cards or overdue payments.
Cons
Only those invited are permitted in. In addition to becoming a Stripe customer, you need to be invited to apply or send out invitation requests. In order to assess your eligibility, Stripe will examine your bank account status and processing history when you apply.
No revolving balance: The Stripe card is a charge card, therefore, each month you have to pay the entire sum on your statement.
How to Proceed If Obtaining a Business Card Is Difficult Without a Personal Promise?
Many organizations may not be able to obtain business credit cards without a personal guarantee due to the limited possibilities and particular eligibility restrictions. In the event that none of the cards above suit you, you can be eligible for:
Apply for a standard business credit card: The benefits of establishing a company credit card may surpass the risks, despite your worries about using your personal credit to support your account.
Investigate secured business cards: The Wells Fargo Business Secured Card is one such secured product to take into consideration if your primary concern is that you don’t have excellent credit. By making a deposit, it enables company owners with dubious credit histories to apply for a new card.
Remain with a personal card: If you’re a freelancer or small business owner, you can easily apply for a new credit card and use it only for business purposes. In this manner, you can still take advantage of consumer perks and protections while keeping your business and personal expenditures separate for tax purposes.
Examine corporate cards: A corporate card may be a better option than a small business credit card if you work for a major company with millions of dollars in revenue and a significant number of employees.