Business credit cards without a personal guarantee
Ensure your personal assets remain secure while still getting the credit your business needs.
Finding a business credit card with no personal guarantee can be difficult. After all, no one wants to issue a credit card and then get stuck with the debt if the business fails.
Despite this, you can still find no-personal-guarantee business credit cards.
We contacted American Express, which was able to confirm that there is no need for customers to sign a personal guarantee for any of its business cards.
Amex business cards
We also contacted Barclaycard Business, which confirmed that none of their business credit cards require a personal guarantee.
Barclaycard Business credit cards
What is a personal guarantee?
A personal guarantee is a legal promise made by a business owner or an organisation to accept the responsibility to repay the credit issued to their business in case it fails to pay its debt.
For a small corporation or a limited liability company that doesn’t have a credit history, the manager or stockholders typically personally guarantee that they’ll pay the debt in case the company goes bankrupt.
If you’ve just started your business and you’re not entirely sure how it’ll go, your personal assets and financial future could be at risk. A card without a personal guarantee helps ensure that your personal finances will be secure even if your business fails.
How can I get a card without a personal guarantee?
- Compare the market. Some banks like Barclays don’t require customers to sign a personal guarantee. You could approach other lenders to enquire about their stance on this.
- Negotiate. If you’ve been a long-time customer with your bank, you may be able to negotiate a card without a personal guarantee. Your chances are improved significantly if you have an excellent payment history, great business financials and low debt. Some banks may waive the personal guarantee after you’ve had the card for a few years or if you’ve built up your business credit score.
- Meet the requirements. Another way is to meet the bank’s size and revenue requirements. Often times you can get past the personal guarantee if your business has a big enough revenue or a minimum amount of employees.
3 tips for using your business credit card responsibly
Follow these tips to limit the chances of falling behind on your repayments and risking your personal assets.
- Control your spending. In times of slow sales, it may be tempting to overspend on your credit card to counteract this. However, once you’re unable to pay off your balance in full and interest payments begin to mount, it’s common to fall into a debt cycle that you can’t get out of.
- Always pay in full. Try not to carry your balance from month to month. That way, you’ll have less pressure and you won’t be held liable for unpaid balances.
- Limit authorised users. Since you’re liable for your business account, make sure to set up spending limits for your employees and authorised users, so you don’t get stuck with a higher balance than you can afford to repay.
Frequently asked questions
The bottom line
It’s difficult to find the perfect business credit card without a personal guarantee. In many cases, you’ll have to meet certain criteria and will often be limited to using the card on the issuer’s products or services.
Compare business credit cards to find one that’s right for you.
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