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How Do I Get Business Credit Without Personal Guarantee?

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  • Written By: Tiffany Manley
  • Edited By: A. Joseph
  • Last Modified Date: 23 August 2014
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There are several steps involved in obtaining business credit without personal guarantee. You might consider separating your business and personal credit and finances, register for a business credit reporting account, look for lenders willing to extend you credit and pay those debts on time. As with personal credit, obtaining and building business credit might take quite some time.

One of the first steps you might take when looking to obtain business credit without personal guarantee is to separate your business credit and your personal credit. Forming a limited liability company (LLC) or corporation is a common first step in doing this. This will make the business a separate entity, complete with its own assets, finances and debts. This alone generally will not qualify you for business credit without personal guarantee, but it is an essential step in the process.

When you have all of the documentation in place from registering your business, you might want to apply for an account with one or more business credit reporting agencies. As you pay your business debts on time, your lenders will report this to the agency, thereby increasing your business credit score. The benefit to registering for these accounts prior to trying to obtain business credit without personal guarantee is that you can provide your lender with this information, enabling the lender to report to the agency.

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Finding lenders willing to extend business credit without personal guarantee when a business is new can be difficult. Suppliers, especially local ones, might be a good source of initial lending. Printing shops and office supply stores are good examples of local suppliers. They generally are eager to obtain new customers and can extend very basic credit terms to you, such as payment within 30, 60 or 90 days. By providing them with your business credit reporting agency number, they can report your good payment history and help build your business credit score.

Paying your business debts on time is a very easy way to build your business credit. An even better was is by making your business debt payments early. The more you do this, the higher your business credit score will be, enabling you to apply for and receive business credit without personal guarantee. Showing a bank that you have done this faithfully for an extended period of time will make the bank much more comfortable with the idea of lending your business money without your personal guarantee.

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Post 2

I didn't know that using my credit card for business expenses could affect my credit score! It's bad enough that I have to put this stuff on my card to begin with, let alone take a credit hit for it.

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