How Can an LLC Get a Credit Card?

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The application process for obtaining a credit card for your LLC is similar to applying for a personal credit card. Getting a card for your business under its own name separates you from the personal liability, which is the benefit of operating as an LLC. However, to obtain a company credit card, you will have to sign a personal guarantee.

Business Credit Card

When considering your application for a business credit card, the lender will weigh several factors, such as the LLC's operating profitability, years in operation and credit history. However, a lender will also take into account the personal credit history of LLC members or member authorized to sign on behalf of the LLC. Unsecured debts carry more risk than a collateral loan. For this reason, banks request personal credit information from small business owners when issuing business credit cards, particularly if the business has no credit history.

Personal Guarantee

In general, a personal guarantee is a promise to pay back the bank if the LLC is no longer able to pay. Asking business owners to sign a personal guarantee is a common lending practice, particularly for business credit cards. The personal guarantee pierces the protection you enjoy as a member under the LLC business structure, ultimately making you responsible if the LLC defaults on the credit card.

Business Credit Score

A good business credit score can improve the LLC's chances of getting a credit card. Unlike a personal credit score, which can range from 300-850, a business credit score ranges from 0 to 100. A rating of 70 is considered good credit. You can establish credit for your LLC by applying for a D-U-N-S identification number, which registers you with Dun & Bradstreet (D&B), the leader in business credit reporting. Once your LLC is in D&B's Paydex database, it will begin generating a business credit profile as it transacts with other businesses.

Research Business Credit Cards

There are a number of lenders who offer business credits, so you should not have a problem locating a lender. However, there are a few things to consider before applying, such as annual percentage rates, particularly if the LLC will carry large monthly balances. Ask the lender if there is a cap on the interest rate, which can rise well above 30 percent. Ask about rewards and introductory offers. Some business credit cards offer low teaser or introductory rates that expire after some time.