Secured Business Credit Cards

What Secured Business Credit Cards Need a Personal Guarantee? 

This article details some of the best-secured business credit cards that require a personal guarantee and some background on personal guarantees and how small businesses may benefit from them. 

About 20% of startups fail within the first year of business, and only a few make it to the five-year milestone. Given these unfortunate circumstances, business lenders want some security regarding giving out secured business credit, as it is predicted that companies will fall out within the initial years of business. With personal guarantees, card owners are held accountable for credit card spending made by their businesses

Almost all small secured business credit cards are issued with the requirement of a personal guarantee. Only older and well-established businesses earning millions in revenue can provide some measure of security to the creditor.

What Is a Personal Guarantee?

Nearly all financial institutions issuing secured business credit cards need a personal guarantee. After signing an application for a guarantee in place, you will be fully responsible for the account and any debt accrued on the account.

The two primary types of a personal guarantees are:

  • Restricted liability gives the bank the right to collect but on a pre-set dollar limit.
  • Limitless liability: This gives the bank the right to hold you accountable for the entire debt, including additional fee charges.

There is less to lose with limited or restricted liability in case of any unfortunate events. Before applying for a secured business credit cards, it is advised to review the terms and conditions to comprehend the card’s kind of personal guarantee clause.

The Best Secured Business Credit Cards with a Personal Guarantee

With a personal guarantee on secured business credit cards, the cardholder is accountable for any outstanding balances on the account. The user will be obligated to repay the debt by law regardless of the financial conditions of their business.

When cosigning a credit company’s card as part of a personal guarantee, you must give your social security number and allow a personal credit check on your report. Undertaking a personal guarantee unbolts profitable charge cards and business credit.

Top-tier Secured Business Credit Cards & Rewards

Business owners come with several perks, such as secured business credit cards with rewards. These rewards include flyer miles, points, and cashback. In order to maximize rewards, shop for a card that offers the best value for business purchases. 

1. Ink Business Preferred® 

Those searching for maximum rewards should review this card as it earns Ultimate Rewards ® points on each purchase. Points can be used for travel or can be transferred to partner hotels or airlines for better value.

2. Ink Business Cash® 

  • Receive $750 as a cashback bonus after spending $7,500 in the initial 3 months of the account coming into existence.
  • Receive 5% cash-back after spending $25,000 for combined purchases at stores and online.
  • Get a 2% reimbursement on the initial $25,000 spent for combined expenses at petrol stations and eateries and 1% cash-back on other purchases. 
  • Activities on your secured business credit cards will be monitored and protected against fraud.
  • Having zero liability, you will not be held accountable for unauthorized expenses on your card.
  • No yearly charges.

The Ink Business Cash card offers rewards that can be accepted for a statement credit. With no annual fee, this card is not at all a bad option. 

3. Capital One Spark Cash for Business

This card offers unlimited 2% cashback on each purchase and no annual fee for the first year. It is a good choice for business owners looking for rewards that offer better value without any complications. 

4. Blue Business® Plus Credit Card from American Express

For businesses that do not want to deal with bonus categories, the Blue Business ® Plus Credit Card from American Express is a solid option as cardholders receive 2X points on each dollar used to purchase up to $50,000 worth of purchases every year. 

  • 2X Membership Rewards ® per dollar spent.
  • Unlimited 1X points per dollar.
  • No annual fee.

5. U.S. Bank Business Edge™ Select Rewards Card

This versatile reward card gives users a choice of 3X bonus rewards from three vast categories that include at least five merchant types each.

  • Receive 3X reward bonuses on an extensive bonus category of your choice. This includes everyday expenses, automobiles, entertainment, and travel.
  • Get unlimited 1X points on all purchases.
  • $0 annual fee, and no charges for employee cards.
  • Receive a signup bonus.

Meeting Revenue Requests May Renounce Personal Guarantee

A personal guarantee is put by the lender when issuing a secured business credit cards so as to minimize risk and as a means of getting some of the money back in case the business shuts down and the owner is unable to repay the outstanding credit balance.

These guarantees are found in the card’s terms and conditions section in the form of specified clauses that elaborate the liability for the debt.

The only way to avoid a personal guarantee is to have a business that generates enough revenue for the lending risk to dissolve. A business should be well-established and make ample profit to qualify for a corporate credit card.

Bottom Line: Utilize Your Business Credit Wisely

According to statistics, starting a business isn’t the hard part; the real challenge is to make your business a successful one. All one needs initially is a registered business name, paperwork and documentation, and some capital investment.  

Lenders, banks, financial institutions, and other credit sources recognize these statistics and are very well familiar with how they work. Most business owners don’t stop applying for company credit because of a personal guarantee. The wiser business owners utilize the secured business credit cards balance sensibly, increasing business credit for an account one at a time.

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