How to build Business Credit without a Personal Guarantee?

How to build Business Credit without a Personal Guarantee?

As a business owner, it’s a difficult task to find a business credit card without having personal guarantee. To establish your business card, you must provide a personal guarantee to the lenders and banks. Banks and lender companies wants to keep their side safe. As the credit card loan are unsecured, lenders require an extra protection in case if you and your business can’t pay its debts.

In this era, almost every lender and bank require a personal guarantee. In some cases, if you have not provide your personal guarantee for business credit card, then your relationship with the bank can helps you. Personal guarantee means that you will be responsible to pay off the loan if your business defaults. And if your business defaults, the lender companies and banks will have all rights to reserve your assets and property. Every lender want to minimize the risk.

Before giving any loan, the lender companies and banks agents visit your business location and require all your business project documentation to make sure that you are using their money in a right place or not.

There are two possible ways to get a business credit cards without personal guarantee.

Use your relationship with the bank

If you want to establish your business credit card but you don’t have a personal guarantee, then it’s a bit difficult task to establish. You might be able to negotiate your way out of a personal guarantee based on your business payments record, low debt to credit ratio and a good business financial. To establish your business credit card, you must have to ask for the suppliers to report your payments history to the credit bureau. But if you have already a line of credit with a bank or lender company, it will waive your personal guarantee requirements.

Meet banks

In order to establish a business credit for large and established business is an easy task other than the business credit for a newly establish business setup. Established businesses might be able to escape the personal guarantee because a well established business have a proper payments history records and a documentation of their workflow. Some business credit cards will waive a personal guarantee if business is  established in a certain amount of time.

 When you apply for business credit, credit card issuers are concerned with your personal credit. Some credit issuers report your history records to personal credit buereaus for example, on time payments, debt-to-credit ratio etc. A good business track history helps you to carry a balance on your credit card.

Which Business Credit Cards Won’t Impact My Personal Credit Score?

 In this era, every bank and lender companies make sure that their money is in safe hand. They make possible all ways to make their side safe and that’s why they require a personal guarantee. That is unless your business meets a specific requirements and unlikely for small business owners.

1 comment
  • Sana Ali Posted on August 31, 2018 7:49 pm

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