Business Credit Cards: No Personal Guarantee

Business Credit Cards: No Personal GuaranteeObtaining a business credit card with no personal guarantee is possible, but with quite a bit of perseverance and, especially, patience. Let’s look at the factors affecting your chances and how to maximise these.
If you try to open a business credit card, you are probably going to find yourself asked to take on a personal guarantee, thus negating many of the benefits of a LLC or Corporation.

The reason for this is that no personal guarantee business credit cards are largely reserved for businesses that are more successful than your average garage entrepreneur is. However with a bit of planning and thought you can work your way to obtaining a business credit card with no guarantee. Just expect it to take a little time.

Here is how the debt liability breakdown usually works:

Sole Proprietors

As a sole proprietor, even if you are utilizing a DBA (doing business as), you and your business are still the same entity. This makes you 100% liable for any debt the business incurs, and is why the corporate or LLC structure tends to be the premiere choice for business organization. This is also why it is wise to think carefully about what debt your business incurs, since the failure of your business could lead to financial ruin for you, personally, up to and including personal bankruptcy.


In a partnership, each partner is liable for all of the business’s debts. Before you think that the liability is shared equally among partners, though, know that it is not.

If one of your business’s creditors comes after you and your partner for debt resolution and your partner’s assets only cover one-third of the debt, you’ll find yourself on the hook for the remaining 2/3.

We have heard several horror stories about business partners, once long-time friends, becoming almost enemies because of the financial ruin that can ensue if a debt-laden business has to dissolve, and one partner is unable to provide for his or her share of the debt repayment.


If you are incorporated or have an LLC, you and your company are separate entities. This means that your business’s debts are not your debts. Except, however, for most business credit card debt.

Credit Cards vs Charge Cards

Before we go any further, let us differentiate between credit cards and charge cards. A credit card comes with a particular credit limit, the maximum amount that can be carried as a balance on the card account.

This amount is not due in full at the end of the fiscal month; instead, the account holder can make monthly payments that cover the interest and at least a modest amount towards the principal, the amount of credit issued to the borrower.

A charge card, on the other hand, is typically paid in full each month. There are certainly exceptions to this, but those exceptions are often more costly than it would be to make smaller monthly payments on a credit card.

The charge card issuer, usually American Express, expects the account holder to pay the balance in full each month, and will often penalize the cardholder for not making that payment in full.

With that information in mind, we can discuss how your business can obtain a business credit card with no personal guarantee.

The short answer is, be in business for several years and have several million dollars of annual revenue (and be able to prove that revenue stream).

Why several years? In short, it is because the majority of new businesses fail within two years; the bank issuing the card wants to be sure the business has passed that mark and is still maintaining a strong revenue stream. If you are determined to work your way towards having a business credit card without a personal guarantee, here are the qualifications you need to make sure that you meet:

1. Be in business for at least two years.

Every major credit card, including those from Chase and American Express, will clearly state on the application that you should have been in business for at least two years.

2. Maintain a strong credit history.

For example, the top of the application for an American Express Business Gold Rewards card states the card is “best for an established business with a strong credit history.”

In order to do this, you will need to have at least a few trade lines reporting on Dunn & Bradstreet. Before opening any trade line of credit, ask them if they report to Dunn & Bradstreet. Favor those that do, and make sure you pay all of your debts on time. Even those who state they do not report to D&B very well might if you fall behind in your payments.

3. Maintain positive cash flow.

If you want to obtain a business credit card without a personal guarantee, you will need a positive cash flow of at least $1 million in annual revenues to qualify for the card.

Once you’ve met the length of business requirements and have the required cash flow, as long as you have a strong business credit history, you should be able to prove that you are credit-worthy as a business, and obtain a business credit card without needing to sign over your own personal credit history on the application.

While you are building your credit, look to non-major credit cards from stores and gas stations to help. These often have looser credit requirements than major credit cards, but sometimes still have strong revenue requirements.

Sometimes, the best option is a gas station credit card, but you should call and check the requirements of these cards, as well as whether or not they report to D&B.

In the meantime, if you really must have a business credit card, your best bet is going to be a business credit card with some sort of rewards. As of early 2014, the best option out there is the Chase Ink Plus, which offers you 50,000 bonus points if you spend $5,000 within 3 months of opening your account.

This card will earn you travel and cash rewards, but does require your own personal guarantee.

With time and prudent spending, you can eventually qualify for a business credit card, no personal guarantee. However, you will have to be very intelligent about the credit lines you do open, and make sure they report to Dunn & Bradstreet. You will also have to keep very accurate records of your revenue, and be prepared to provide proof that your revenue exceeds at least $1 million or more each year.