No Personal Guarantee Business Credit Cards
Are you searching for no personal guarantee business credit cards? Let me be the first one to tell you that the credit card issuers for these types of cards do not advertise! Only the most creditworthy small businesses qualify and receive a pre approval invitation.
Some credit cards like the Sam’s Club Discover Business account will waive a personal guarantee if your company has less than $5 million in annual sales or revenues or is less than 2 years old or has fewer than 10 employees.
Now if you’re designated as a sole proprietorship or partnership then you automatically disqualify and must provide a personal guarantee for this card. That should give you all the more reason to incorporate your business.
Keep in mind there are high limit business credit cards that will report only to your business credit reports. After establishing a positive record with these issuers you can apply for a second round of funding without supplying a personal guarantee depending on the issuer. But let me remind you that regardless of what you’ve read or heard it takes much more than simply generating a paydex score to qualify for these cards let alone be invited to apply.
Recently I shared with you the top 10 biggest myths surrounding business credit and the 80 paydex score was ranked #1.
The reason for this was that an 80 paydex score with Dun & Bradstreet is said to be like having a 720 personal credit score. While that may have some truth to it there are some key details that get left out. For example, you can have four positive trade lines reporting with only $200 being the highest credit limit on all four accounts and still generate an 80 paydex score.
This is because Dun & Bradstreet’s rating system requires only four positive trade references but if the four you have are small limits then this hardly qualifies your business as creditworthy in the eyes of these exclusive credit card issuers.
As result of this misinformation it’s easy to get frustrated and just throw up your hands and say there is no such thing as business credit cards without a personal guarantee. Wrong!
While the Sam’s Club Discover Business card is just one example not a personal recommendation, I want you to see firsthand that these types of cards do exist.
It’s not locating the cards that are difficult when you have access to the right source; like my Business Credit Insiders Circle. We provide these no personal guarantee business credit cards to our members in our business credit builder system.
The problem lies in getting business owners to understand what it takes to qualify. The other day I received an email from a business owner boasting about his 80 paydex score asking for a list of my no pg business credit cards. The first thing I asked was what types of credit has he established in the company’s name and what was the highest limits being reported.
It was no surprise to hear that he was only listed with Dun & Bradstreet and had 5 positive trade lines with the highest credit limit of $2,500. He was definitely not in a position to apply for a no pg card and it was apparent to me that he read from another source that all you need is a strong paydex score.
This brings me to another point in qualifying for business credit cards without a personal guarantee. Having only a Dun & Bradstreet file is like having only one personal credit file with the credit reporting agencies. Let’s say all you have is a personal credit file with Equifax but have no file with Transunion or Experian. You would never be able to get approved for a mortgage because you don’t have a complete financial picture for lenders to review your creditworthiness.
Same thing applies to business credit lenders and credit card issuers. You can qualify for a business credit card with no personal guarantee but to be considered a credit worthy business you must establish a strong credit file with the three main business credit bureaus. This includes a good blend of credit like vendor credit lines, a business loan, lease credit and revolving credit.
Do you have the best small business credit cards for building a creditworthy company while protecting your personal credit?
Looking to obtain no personal guarantee business credit cards? Become a member of my Business Credit Insiders Circle and gain access to a proven step-by-step business credit building system. A system that provides you access to vendor lines of credit, fleet cards, business credit cards with and without a PG, funding sources and lenders that report to all the major business credit bureaus. Submit your name and email below for details and receive a free audio seminar ($597 value) => =>
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About the author
Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in ‘Fox Small Business’,'American Express Small Business’, ‘Business Week’, ‘The Washington Post’, ‘The New York Times’, ‘The San Francisco Tribune’,‘Alltop’, and ‘Entrepreneur Connect’.