No Personal Guarantee Business Credit Card - is it Possible?

I'm starting my business and wondering how can I obtain a business credit card without my personal guarantee?
Expert answer by Alex Gerard,
9 years experience in banking consulting

For many starting entrepreneurs, obtaining a business credit card is an important and necessary step. It will not only help you to close any short business financial gaps, but also to keep a better track of your business expenses and to build your company credit independent from your personal credit

When applying for business credit card, generally entrepreneurs want to avoid a personal guarantee if possible. A personal guarantee will tie personal assets to the success of your new business venture. If your business fails and you can’t make your credit card payments, the bank can liquidate your personal assets. Besides risking household assets, you also risk taking a major hit on your personal credit score.

Frankly, at the beginning of your business venture, you might not be able to secure a credit card without a personal guarantee. Many banks require you to show a track record of business health and successful financial transactions before allowing you to open this elite type of account. Some banks offer business credit cards applications with no personal SSN, but only for business with an established credit history and solid cash flow. Some of the examples are:

  • Sams Club Discover Business card require your personal guarantee for businesses that are 2 years or younger, has less than 10 employees, have less than $5mm in annual sales, are partnerships or sole proprietors
  • Bremer Bank Visa Signature Business Company Card asks no personal guarantee from medium to large businesses, having more than $1mm in sales and more that $350,000 in profits annually
  • WSFS Bank offers Business Signature Company Credit Cards with no personal guarantee for medium to large companies with more than $350,000 annual profits for 2 years

However, by making purchases on a regular business credit card and paying for them in a timely manner, you can start establishing a good business credit history.

When applying for a personal credit card, you usually need to submit a Social Security Number, SSN. Business credit card applications often also require you to list an Employer Identification Number, EIN. This number can be obtained from the federal government and identifies your business for tax purposes.

Opening a business credit card is a great way to establish business credit and separate professional activities from personal financial transactions. Obtaining a business credit card without a personal guarantee is the best possible option. If you can’t acquire this type of card immediately, don’t despair. If you steadily make good financial decisions, the odds are good that you’ll qualify for one over time.

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