Credit cards for businesses are helpful instruments for controlling corporate expenditures. You may gain an advantage thanks to the extensive range of incentives and bonuses that many of these accounts provide. However, the majority of commercial credit cards need a written agreement as a requirement for creating the account. This means that you are solely accountable for any transactions and any debt that may arise.
If it makes you anxious, one option to explore is applying for a company credit card that does not require a personal guarantee. Your choices will be much more restricted, and you'll be expected to meet tight requirements, but a few opportunities remain.
The following explains the operation of some of the most advantageous business Credit Cards without Personal Guarantees that are now on the market and do not call for the provision of a security deposit.
Reasons Why Banks Require Personal Guarantees for Business Credit Cards
Like any other lender, credit card companies strive to limit their exposure to harm. The issuer may rest easier knowing that the creditor will treat the bank account as agreed upon with a personal guarantee. The guarantee may be considered a kind of insurance plan. If you fail to make your monthly mortgage payments and go into default, the credit card company can take legal action to recoup any money they are owed.
How to Reduce the Amount of Personal Liability Associated with Credit Cards for Company Purposes?
Should there be a breach of contract on your part, the monetary amount that you'd be accountable for paying is mainly determined by the sort of personal responsibility provision that is in place:
- Limited liability:
It means that the issuer may only recover up to a certain maximum amount.
- Complete responsibility:
The lender is liable for the amount owed and any financial and legal expenses.
You can limit the amount you would be accountable for by taking charge of your bank account. This is an alternative to eliminating accounts that require assurance from users. By making entire payments on time, stopping all penalties when you are unable to pay the minimum required amount, and monitoring your balance periodically, you may prevent unforeseen problems from occurring.
Examine the charges made by your personnel, if any, and use cards tied to the bank account. Use this option if accessible because many providers let primary users set fewer charge limits on staff credit cards. This is essential if you have a business that uses worker cards.
How to Obtain Commercial Business Credit Cards without Personal Guarantee?
In place of Business Credit Cards without Personal Guarantee, it may utilize alternative methods to safeguard its financial interests. For instance, you could be required to create a transfer of money in a bank account and ensure that it is adequately filled at all times. Whereas the funds in the report are not a traditional security deposit, they do serve to guarantee the line of credit.
It is also necessary to show that your company is thriving by offering an exceptionally high monthly or yearly income.
A business card is an alternative in this case. Since corporate credit cards are offered to businesses rather than individuals, no personal guarantees are usually required. Therefore, they are designed not for the person or sole entrepreneur managing small-scale companies but for an LLC or organization.
Best Business Credit Cards with No Personal Guarantee
The following is a list of the Best Business Credit Cards with No Personal Guarantee that are readily available nowadays:
SVB Innovators Card
SVB helps rapidly expanding businesses. Silicon Valley Bank designed these SVB Innovators Credit Cards specifically for start-ups. Distributing cards to personnel will also not cost you an arm and a leg each year, and you won't even need a personal guarantee. Since you won't carry a balance, there is no annual percentage rate (APR) and no late fees using this charge card instead of a credit card.
Your firm may benefit from the flexible rewards options offered by the SVB Innovators Card, a company credit card that offers two reward points against every dollar spent. These points can be redeemed for bill credits, gift certificates, items, or vacations.
Brex Corporate Card
The Brex Business Credit Card is ideal for those who own a company and are looking for generous incentives. It offers an excellent loyalty program but does not require a personal guarantee. Ridesharing services earn account holders 8X reward points. Against traveling, they offer 5X reward points, dining out 4X reward points, subscription software 3X points, and the rest only 1X points.
In order to get the credit card, firstly, you need to create a Brex Checking account, and the maximum amount that may be loaded onto your card is equal to the sum that is now in your Brex account. You cannot apply for a Brex Business Card if your business is a sole proprietorship or an unregistered association. Other than that, there are no restrictions on your organization's size or the personnel you have.
Sam’s Club Business Mastercard
Those who own businesses and want the opportunity to earn money back with no yearly subscription might consider applying for a Sam's Union Corporate Mastercard. It is another Best Business Credit Card. To qualify for this account, you'll need to show that your business earns a minimum of 5 million USD in sales annually, maintains that status for around two years, and employs 10 people or more.
Office Depot OfficeMax Corporate Credit Card
An excellent choice and the Best Business Credit Card for proprietors of companies that require ongoing balance transfers. If you apply for an Office Depot Card and spend $150 or more during the first 3 months, we will credit your account $50. You may get 2% cash back on all charges by linking your Office Depot loyalty subscription to the report. Unlike a prepaid card, a credit card allows you to "revolve" around your debt, making it useful when immediate payment is demanding. There is no yearly charge, and the fluctuating APR is now 23.99 percent.
