When an individual obtains a business loan or credit card, the loan will generally be for an extensive amount of money. There is no guarantee that the company acquiring the loan will be successful, and therefore, there may be a substantial amount of risk involved for lenders. As a result, most lenders will offer a secured business credit card to small business owners.
In order to obtain a secured business credit card, an individual will use company assets or personal assets as collateral for the loan. In the event that an individual cannot repay the business loan, the lender can acquire the assets that were used as collateral.
If an individual is attempting to establish a small business, it is likely that he/she will be required to offer personal assets, such as his/her home, as collateral, as the company will not yet have any available assets. This is a very risky move that many people are not comfortable engaging in. As a result, a small business owner may seek business credit cards without personal guarantee.
Business credit cards without personal guarantee are lines of credit that are extended to small business owners without them being required to provide collateral. It is possible for an individual to obtain business credit cards without personal guarantee. However, the process that is involved can take an extensive period of time.
Some companies, such as Chase, will offer individuals small business loans without personal guarantee. An individual can also obtain credit without personal guarantee from companies such as Staples and Dell. If an individual is able to build business credit using these lines of credit, he/she may be able to obtain business credit cards without personal guarantee. He/she will also be required to obtain an Employment Identification Number and a separate mailing address.