Hazards Of Business Credit With No Personal Guarantee?

If you're searching for business credit with no personal guarantee, you should be aware that there are times when applying for these types of credit lines may not be suitable for your business. In general, business applications will allow you to apply for credit in the name of your business - without risking your personal credit score, but there are many programs that do not require a personal guarantee.

No Personal Guarantee - The Disadvantages

Depending upon the length of time your company has been in business, many banks and lenders may consider extending lines of credit your company without a personal guarantee. However, there will almost always be a time when a bank or potential lender will not consider a business application -- without a personal guarantee.

If you are applying for large lines of credit or business loans, banks or finance companies will not take the risk of default without making you liable as an individual. In order to apply for some types of business loans, business credit cards or lines of credit, you will be required to personally guarantee the credit line. Also, if your business defaults on the line of credit or loan, then you will be responsible individually and will have to pay the amount due, or face collection or civil suit proceedings.