No personal guarantee business credit cards depend on your company's credit history and cash flow
Obtaining no personal guarantee business credit card great way to separate firms' credit from owners'
Most business owners start their businesses using personal money from savings accounts, retirement funds, or family loans. Their goal, however, is for the business to become profitable and self-sufficient; able to support a no personal guarantee business credit card.
More than 45% of small business people use their personal credit cards for business expenses according to a 2003 study by the Small Business Administration (SBA). Most frequently used credit were personal and business credit cards, lines of credit and vehicle loans.
More and more small firms are using credit card for business purposes, while financing a start-up business with credit is also increasing. Bank loans under $100,000 jumped 45% in just one year according to the SBA study on small business lending in the USA.
In this day and age, getting a no personal guarantee business credit card is not an easy task. It starts with building your business credit, separating personal credit from corporate credit, reviewing your cash flow and asset management and building a strong relationship with your bank manager. Moving away from personal guarantees builds credibility for your business, protects your personal assets and allows purchase of vehicles, equipment, computers and other assets with no personal guarantee.
Beyond protecting you and your family, creating a good corporate credit profile will save you money! By getting a favorable FICO credit score, business owners will lower the interest they pay on loans, leases and credit cards. It also frees their personal cash to do fun things with their family and friends.
A great company credit score also enhances your corporate image. When other business owners check your company credit report to rate your firm, it can help solidify that sales pitch with new customers and help keep the old ones. A business with its own credit history has increase credibility and perceived professionalism with governments and other business businesses.
By not keeping personal guarantees out of your business, you can also be held personally liable for any business debts should your company go bankrupt or simply close. If that happens you may want to look into small business bad credit credit card that gives you a chance to rebuild the company credit again.
So think carefully about obtaining a no personal guarantee business credit card if you want to keep your company books cleanly separates from your personal life.