Business credit cards with no personal guarantee do exist—if you can qualify for one. These cards reduce or eliminate an owner’s personal liability to repay card debt, but they typically are issued to businesses with at least $1 million to $4 million in annual revenues and one to two years or more of cash reserves.
For businesses that don’t meet these high thresholds, a small business credit card that offers low rates and generous rewards is an ideal solution. A good option is the American Express Blue Business Cash™ Card. It offers the ability to earn 2% cash back on purchases up to $50,000, and 1% thereafter.
Business Credit Cards Without a Personal Guarantee: Costs, Terms & Qualifications
How a Business Credit Card with No Personal Guarantee Works
With a small business credit card, a small business owner is responsible for providing a personal guarantee (or promise) that they will pay the amount owed in the event the business or cardholder fails to do so. This protects the credit card issuer, but places additional risk on the owner. This can be avoided by getting a business credit card with no guarantee, such as a corporate credit card, corporate gas card, or prepaid card.
Card issuers are willing to issue business credit cards with no guarantee because they have offset the risk. They do this by restricting cards to large businesses with good business credit and by requiring the card be paid in full each month.
The three types of business credit cards with no personal guarantee are:
1. Corporate Credit Card with No Personal Guarantee
Corporate credit cards are typically issued to companies with $4 million or more in revenue and at least 15 card users. Liability may rest solely with the business or it may be held jointly between the business and individual cardholders. Most corporate credit cards must be fully repaid monthly, meaning your business pays no interest. As a result, you’ll typically pay higher annual card fees, ranging from $25 to $100 per card, and will be required to spend at least $250,000 to $1 million per year.
How Corporate Credit Cards with No Personal Guarantees Work
Corporate cards are issued with either full corporate liability or combined liability between the company and the employee cardholders. Monthly payment responsibility falls to either the company or the individual cardholders.
The two types of liability for corporate credit cards with no personal guarantees are:
Full corporate liability – The company is billed directly for all account charges and is responsible for paying them. Since employees are not responsible for paying their individual charges, they don’t have to wait to be reimbursed, which can streamline a business’ accounting practices.
Joint corporate and cardholder liability – The employee cardholder typically pays the monthly bill and is then reimbursed by the company. American Express in this scenario says the employee is liable for any charges “…that are personal in nature and which do not benefit the (company) for legitimate business purposes….”
While corporate credit cards include a range of benefits, they may also offer reduced cash back or points rewards compared with the best small business credit cards. The One Card from Capital One, for example, pays 1.5x points on all spending if you choose a 14-day billing cycle or 1.25x points on all spending if you choose a 30-day billing cycle. In comparison, the issuer’s small business credit card, the Capital One® Spark® Cash for Business, offers 2% cash back on all spending.
Who Corporate Credit Cards with No Personal Guarantee Are Right For
Businesses that use corporate cards typically have 15 or more cardholders, at least $4 million in annual revenue, and an existing corporate credit card policy agreement. Corporate cards are designed for businesses that make a minimum of $250,000 to $1,000,000 annually in card transactions.
Corporate credit cards are right for you if you need the cards to pay for travel and entertainment expenses. Some cards offer built-in expense management systems, which is a nice feature if your business has many people who incur travel and entertainment expenditures. Such cards also may offer:
- Hotel and resort complimentary benefits
- Access to airport lounges
- Annual airline fee credits
- Reimbursement for enrollment into Global Entry or TSA PreCheck airport screening programs
How to Get a Corporate Credit Card with No Personal Guarantee
Major issuers like American Express, Capital One, Chase, and Citibank all offer one or more corporate credit cards. American Express offers six different corporate card options, including cards designed for frequent business travelers and corporate purchasing agents.
Since the requirements for approval are high, card issuers like American Express require you to call or chat live with a team member prior to approval. During the application process, you’ll need to provide the following:
- Recent audited financial statements
- Details on the company’s structure and organization
- Tax information, including a federal tax ID
- Contact information for the company’s authorizing officer
If your company doesn’t have enough revenue to qualify for a corporate credit card, Brex is a good alternative. The startup offers business credit cards with no personal guarantee to early-stage technology companies. Approval and credit limits are based on your bank account balance ($100,000 minimum). The first five cards are free, and Brex charges no annual fee.
2. Corporate Gas Card with No Personal Guarantee
Companies that qualify for a gas card without a personal guarantee typically have $1 million or more in annual revenue. Like corporate credit cards, a gas business credit card with no personal guarantee can either have company-only liability or card-specific liability. This means liability is either fully on the business or shared with the individual cardholder.
How Corporate Gas Cards with No Personal Guarantees Work
Corporate gas cards come in the form of either fuel cards or fleet cards, some of which don’t require a personal guarantee. Fuel cards typically are for businesses with no more than two vehicles, while a fleet card is used by businesses with two or more vehicles.
It’s not uncommon to find gas cards that require a personal guarantee. In these cases, liability is held jointly between the business owner and the business. Employees are not held responsible for transactions on their cards when a personal guarantee is required.
Small business gas cards may charge APRs as high as 25%, while most fleet cards charge APRs of between 15% and 20%. Small business gas cards typically do not charge a monthly fee, although you may be required to pay an annual fee of $25 to $99. Fleet cards, meanwhile, may carry a monthly charge of up to $10. Issuers may waive fees if your company meets a monthly gallon threshold.
Who Business Gas Cards with No Personal Guarantee Are Right For
To qualify for a business gas card with no personal guarantee, the owner will need to have at least fair credit, with many issuers requiring a personal credit score of 650 or higher. Fuel cards are best for businesses that use no more than two vehicles regularly. Fleet cards are best for businesses that operate two or more vehicles and use between 1,000 and 5,000 gallons of gas per month on average.
A corporate gas card might be the right business credit card with no personal guarantee if you want to:
- Restrict the types of purchases to gas and vehicle repairs: Some small business gas cards can be used to make purchases other than gas or maintenance, but fleet cards restrict payments to gas purchases, vehicle repairs, and maintenance at participating businesses.
- Receive discounts on fuel: Gas cards may offer discounts of as much as 4 cents per gallon, while fleet cards give users a discount of as much as 10 cents per gallon. Fleet cards may also offer discounts of between 10% and 15% off the purchase of tires, general maintenance, or vehicle repairs.
How to Get a Business Gas Card with No Personal Guarantee
Corporate gas cards are typically co-branded with a card issuer and a fuel company. For example, Shell has a co-branded a small business gas card with Visa. In fact, Shell is currently Fit Small Business’ best small business fuel card and is one of the few corporate gas cards that offers the possibility of no personal guarantee.
Firms in business for at least three years and with a minimum $1 million in annual revenue may qualify for a Shell business card without a personal guarantee. Businesses that don’t meet these minimums can qualify, but will be subject to a personal guarantee.
The Shell Small Business Gas Card has no monthly cost and offers a $0.03 discount per gallon. The card can be used at over 14,000 participating gas stations.
3. Prepaid Business Credit Card with No Personal Guarantee
Prepaid business credit cards are backed by a business owner’s cash, and there is therefore no liability or personal guarantee. Prepaid cards are best for maintaining fiscal discipline or if you are unsure whether you’d qualify for a credit card. If you need two or fewer cards, you’ll typically pay no monthly fee; otherwise, you may pay $25 or more per month.
How Prepaid Business Credit Cards with No Personal Guarantees Work
Prepaid cards are purchased with cash. Once the cash is used, the card can no longer be used unless it’s reloaded. Because of this, there is no risk to the card issuer, and so the business owner won’t be required to provide a personal guarantee and your credit won’t be checked.
Prepaid cards work on the same card networks as credit cards—including American Express, Mastercard, and Visa—which means you’ll be able to use them in all the same places you would use a credit card. But you won’t be able to earn cash or points like with a small business credit card, as prepaid business credit cards don’t offer introductory or ongoing rewards.
Prepaid credit cards don’t help you build business credit the way unsecured and secured business credit cards do. They do mitigate a business owner’s risk because employees can only spend the funds available on the card, which can offer protection against theft.
Who Prepaid Business Credit Cards with No Personal Guarantee Are Right For
A prepaid card might be the right business credit card with no personal guarantee if you want to:
- Limit your risk of theft: Many prepaid business credit cards offer zero liability protections. If your card gets lost or stolen, the issuer may ensure you lose no money. You can also set spending controls to protect against employee theft.
- Prevent overdrafts or overlimits: Unlike a traditional debit card tied to a bank account, prepaid business credit cards won’t let you spend more than what’s available in the card account. This means you’ll never face overdraft or overlimit fees.
- Avoid having your credit checked: Because issuers face less risk with prepaid business credit cards, they won’t check your credit when you apply. This makes a prepaid card ideal for a business owner with a credit score below 660.
How to Get a Prepaid Business Credit Card with No Personal Guarantee
Prepaid business credit cards with no personal guarantee are widely available for online application. To get a prepaid credit card without a personal guarantee, you’ll have to enroll in one of the online programs. You may be approved instantly.
If you want a prepaid business credit card that doesn’t require a personal credit check or personal guarantee, Bento for Business is a solid pick. With Bento, you control where your employees spend their money, how much they spend, and when they can spend it. You can issue cards to all of your employees and track their expenses in real-time.
Small Business Credit Cards with a Personal Guarantee
If you can’t qualify for a business credit card with no personal guarantee, there are plenty of good small business cards to choose from. You’ll be liable for repayment, but these cards are still a great way to separate business and personal expenses, establish business credit, track business charges, and earn rewards.
The three types of small business credit cards with a personal guarantee are:
1. Small Business Credit Card
This is the most common type of business card with a personal guarantee. Small business credit cards are available from all the major card issuers, and liability is typically held jointly between the business owner and the business.
A small business credit card can be a good option if:
- Your business doesn’t qualify for a corporate credit card: Small business credit cards are a great option for businesses that don’t qualify for a corporate credit card. These cards are generally used to pay for working capital expenditures and can be issued to multiple employees. There is typically no employee liability.
- You want to earn rewards: Most small business cards offer a rewards program either in the form of cash back or points rewards. Some cards, like the Chase Ink Business CashSM Credit Card, offer higher rewards within specific spending categories. Ink Cash offers bonus rewards on purchases at office supply stores, gas stations, and restaurants.
- You prefer a fixed return on all spending: Other cards offer a fixed return on all spending, like the Capital One® Spark® Miles for Business card, which pays unlimited 2x airline miles for each dollar spent.
For more information on small business credit cards with a personal guarantee, check out our guide to the best small business credit cards. Our top pick is the Chase Ink Business CashSM Credit Card. New cardholders are eligible for a bonus up to $500.
2. Small Business Secured Credit Card
Like a prepaid small business credit card, a secured credit card is a credit card backed by cash. Your available credit is equal to the amount of cash collateral you have on deposit. The card otherwise acts just like a regular small business credit card. You have to make monthly payments and you’ll be charged interest on any outstanding balances.
A secured credit card is designed for business owners with little or no credit. Secured credit cards can be used to both build personal credit as well as business credit. You may be able to earn cash back rewards and pay no annual fee. The cardholder is personally liable for any outstanding debts.
The Wells Fargo Business Secured Credit Card is currently rated as a top secured card by Fit Small Business. The card offers credit lines up to $25,000 and up to 10 employee cards.
3. Small Business Charge Card
A small business charge card is like a credit card except that its balance is paid off in full at the end of every month. This is different in that there are no rollovers and no APR charged on outstanding balances. Instead, business owners are required to sign a personal guarantee to settle their company debts at the close of each billing cycle.
This means that a charge card doesn’t have a revolving line of credit. Instead, late fees and restrictions are assessed on any late payments. The size of the line of credit is dependent on a borrower’s ability to repay.
American Express is one of the few companies that issue charge cards. You generally must have a credit score of 750+ to qualify. Charge cards may offer significant rewards and benefits, similar to what small business credit cards offer. They also may charge annual fees of several hundred dollars or more.
Frequently Asked Questions (FAQ) About Business Credit Cards Without a Personal Guarantee
If you still have questions about business credit cards with no personal guarantees, here are some of the most frequently asked questions. If you don’t see an answer to your question, visit the Fit Small Business Forum and post a question there.
Some common questions about business credit cards with no guarantee are:
Do All Business Credit Cards Require a Personal Guarantee?
No. All small business credit cards require a personal guarantee to repay, but corporate credit cards, prepaid business credit cards, and some business gas credit cards waive the requirement. Your business must meet revenue and spending minimums to qualify for a corporate card or a gas card with no personal guarantee.
How Do I Qualify for a Business Credit Card with No Personal Guarantee?
Businesses typically are eligible for a business credit card with no personal guarantee if they have $1 million to $4+ million in annual revenue, plan to charge a minimum of $250,000 to $1 million annually to the card, and have at least 15 cardholders. Sole proprietorships and businesses run from home typically will not qualify.
What Do Business Credit Cards with No Personal Guarantee Cost?
Corporate credit card annual fees typically range from $25 to $100 per card. Most corporate cards are charge cards and charge no APR. Fleet cards may carry a monthly fee of up to $10, although fees may be waived for companies hitting a monthly gallon threshold. APRs range from 15% to 20% on unpaid balances.
A small business credit card without a personal guarantee limits a business owner’s liability, but other than corporate credit cards, prepaid cards like those offered by Bento, and some fleet cards, all small business credit cards require a personal guarantee.
If you are thinking about trying out a small business credit card with a personal guarantee, check out the American Express Blue Business Cash™ Card. It offers competitive rates, 2% cash back, and you can get employee cards at no additional cost.