Learn how to get business credit with no personal guarantee

1. How to Get Business Credit…
With No Personal Guarantee

2. Ty Crandall
Director of Business Services
(877) 600-2487
ty@creditsuite.com
www.CreditSuite.com/businesscredit

3. Can Someone REALLY Get Business Credit
with No Personal Guarantee?

4. What is a Personal Guarantee?
• Agreement that makes one liable for one's own or a third party’s
debts or obligations. A personal guarantee signifies that the lender
(obligee) can lay claim to the guarantor’s assets in case of the borrower
(obligor) default
• It is equivalent of a signed blank check without a date. The obligee
is generally not required to seek repayment first from the obligor’s
assets before going after guarantor's assets. The lender’s actions are
usually based on whose assets are easier to take control of and
sell. Once signed, a personal guarantee can only be cancelled by the
obligee
• Business Dictionary.com

5. What is a Personal Guarantee?
• By making a guarantee you are are putting yourself - and
your assets - on the hook, by acting as the loan's cosigner. If
your business dissolves, you will be responsible for
repayment. Creditors will go after you in the event that your
business fails to repay the loan
• Inc.

6. What is a Personal Guarantee?
•A personal guarantee is a promise made by a specific person, an
organization or other entity; to be known as the guarantor and to
accept responsibility for some other party's debt in the event the
debtor fails to pay it
•The usual and most common purpose of a personal guarantee is
typically to allow an organization or person to obtain credit when they
lack a credit history, or they do have one, but lack a credit rating
sufficient to qualify for credit
•Wikipedia

7. What is a Personal Guarantee?
• In the business world, personal guarantees are requested when
the business is unestablished, and lacks credit history, a credit
profile, and credit score
• They are also sometimes required for larger loan amounts, or
always requested for loans guaranteed by SBA… conventional
bank loans…
• And it’s also required with some other higher loan amounts in
which no collateral is being pledged

8. Personal Guarantees
• When you complete a loan application and provide your social
security number, lenders will almost always pull your personal credit
to make the lending decision
• And, you’ll also in most cases be providing a personal guarantee
• Although this might be a necessity with some conventional and
higher amount loans, it’s not required for smaller business credit
cards
• With business credit cards, if the business does have established
business credit, that credit can be used to secure the credit cards…
so no personal guarantee is needed

9. Personal Guarantees
• It’s important to keep in mind, that the entity you choose can
also make you liable
• For example a sole proprietorship or
partnership means you as the owner are liable
for your business debts, no matter if you do or
don’t put your SSN on the funding application
• Corporations and a LLC doesn’t require you be
personally liable or your business debts

10. Let’s Look at the “Big Boys”
• Some of the largest private companies in the United
States include:
• Dell, Michael Dell is the CEO
• Mars, Paul Michaels is the CEO
• PricewaterhouseCoopers, Greg Brenneman is the CEO
• Publix, William Crenshaw is the CEO
• Pilot Flying J, John Compton is the CEO
• Does it make sense that these CEOs personally
guarantee their business debts?

11. Let’s Look at the “Big Boys”
Dell does about $57 Billion in business annually, and has over 83
reported accounts on their business reports with Experian

12. Let’s Look at the “Big Boys”
• With $57 Billion in revenue, Dell has an appetite for VERY high
credit limits, even exceeding $100 million
• So do you think when Dell needs this type of money and goes
to get credit, that Michael Dell personally guarantees the
financing and credit that Dell obtains?

13. Let’s Look at the “Big Boys”
• The highest amount he’s (probably) personally financed is his
home, worth $73.3 million
• So his credit isn’t even strong enough to secure the type of
capital the business needs to operate and grow, as they often
need and use $100 million +++
• This is actually typical of all large businesses, and
many small businesses, the company quickly outgrows
the credit of the individual owner, and at some point
the business itself has to stand on it’s own

14. Let’s Look at the “Big Boys”
• This is why the build business credit!

15. Per SBA…
• Per SBA, credit limits on business accounts are 10-100 times that of
consumer credit
• This is because a business has a much bigger need for credit than an
individual does
• Loans amounts, and credit limits, are always higher on business
accounts than with consumer accounts… because businesses make and
spend a lot more money than a consumer will

16. Business Credit
• With business credit, the business itself establishes its own credit profile and
score
• This profile and score is for the business, which is identified by its EIN
number… not the SSN of the owner or CEO
• And once this profile and score are established, then the business can get
credit in its name, with no need for a personal guarantee from the owner
• Remember what Wikipedia stated…
• A personal guarantee is needed only “when they (the business) lacks a
credit history or lacks a credit rating”
• But once the business has its own credit, it can then get money using
that credit, just as EVERY big private or public company does

17. Business Credit with No Personal Guarantee
• Getting business credit without a personal guarantee is not only
possible, but it’s necessary for a business to grow
• This is because businesses way outgrow the credit of their owners, and
this often happens very quickly
• So even if you do personally guarantee your business debts now, that’s
unsustainable long-term

18. But Here’s a Secret…
• But here’s a secret, business credit isn’t only for the Big Boys
• ANY business can get business credit without a personal
guarantee
• The KEY is that this is only possible if the business has an
established credit profile and score

19. Getting Business Credit with no PG
• When companies are approved for business credit, it’s typically not due to
their size
• Instead credit issuers and lenders have a set criteria that must be met for
approval
• The approval isn’t based on company size, but instead it’s based on the
company being “established”
• To determine whether any business is established, lenders and credit
issuers have a “credibility test” they run on every application for credit

20. The Credibility Test
• You must have a physical business address, or use a virtual
address
• You’ll need to have a business phone number, preferably a toll
free number… and it’ll need to be listed in 411
• You’ll need a business fax number
• You should have a professional email address, and website
• You must have the proper licenses for your business, industry,
city, county, and state
• You need an EIN, entity setup, and bank account
• There are actually 20 items on this test that will be reviewed

21. The Credibility Test
• If you meet this criteria, you can then start to get approved for
starter vendor accounts
• These are accounts that you can get approved for even with no
established credit
• And these accounts report to the business bureaus Dun &
Bradstreet, Equifax, and Experian
• So by getting approved for this credit, using it, and
paying your bill on time, you can then establish your
business credit profile and score

22. Common Mistakes
• Many people think that nobody can get credit without a
personal guarantee
• You now know that’s just not feasible, or logical… companies
have to get business credit to obtain the capital they need for
growth
• But the reason this belief, or myth exists, is because of a few
common mistakes that business owners often make that end up
with them getting declined when they apply

23. Common Mistakes
• The most common mistake that’s made when applying for
business credit is applying for credit in the wrong order
• Stores and lenders will NOT approve you for no personal
guarantee credit until you’re business credit is established
• So you can’t start getting credit there, or you’ll get denied

24. Common Mistakes
• You also can’t put your SSN on the application
• If you do this, they will pull your personal credit, and you will be
guaranteeing the debt
• Many people think they have business credit because they have a credit
card with their business name
• But if a SSN was supplied to get that card, that’s not usually real business
credit as personal liability is involved… and the account might very well
report to the personal bureaus not the business bureaus
• So leave your SSN off of the application when applying

25. Common Mistakes
• Also keep in mind, many front-line people you speak with who work
for credit issuers, don’t know about business credit
• Even business bankers aren’t trained on business credit
• So they’ll often tell you that a SSN must be supplied… because they
don’t know any better
• Also remember, you must insure your credibility is in check to get
approved
• If it’s not, you’ll be seen as unestablished and will get denied

26. Make Sure You Get Vendor Accounts FIRST
• Once you know your business is setup credibly, it’s time to apply for new
business credit
• When establishing business credit, there’s actually three types of credit
you can get:
• Vendor credit, starter accounts that offer Net 30 terms
• Store credit, revolving credit cards available in retail stores
• Cash credit, revolving credit cards such as Visa and MasterCard that card
issuers or banks approve you for

27. Get Vendor Accounts FIRST
• You must get approved with vendors first who offer Net 30 terms
• Then after you use those accounts and pay your bills the accounts will
get reported to the business credit reporting agencies
• Then and only then will you have an established business credit profile
and score
• Once your business credit’s established, you can start to get approved
for store revolving credit next

28. Get Vendor Accounts FIRST
• You should seek out vendors who will approve a business for credit,
even if none is established yet
• There are actually many vendor sources who are well known for this:
• Uline
• Quill
• Reliable
• Laughlin and Associates
• Just to name a few

29. Get Vendor Accounts FIRST
• To start business credit, you first should get approved for accounts with
these vendors
• Some will require you purchase their products first
• Some will have you make 3 orders and pay before they’ll issue you a
line-of-credit
• But all of the sources I listed will approve a brand new business, even if
you have no credit now

30. Get Vendor Accounts FIRST
• You’ll want to insure you have a total of 5 payment experiences
reported before you even think of applying for store credit
• A payment experience is the reporting of an account to a business
reporting agency
• So Quill for example reports to both D&B and Experian
• That means that one account will count as two payment experiences
• Laughlin only reports to Experian, counting as one payment experience

31. Get Vendor Accounts FIRST
• All vendors don’t just give out no personal guarantee credit
• Many have requirements that must be met first
• But there are a lot of sources who don’t have these
requirements

32. Get Vendor Accounts FIRST
• Laughlin and Associates only requires a purchase, and that you have a
411 number and business bank account
• Quill won’t approve you right away.. Unless your D&B profile is
established… but they will approve you if you first place a few orders
with them
• Reliable Office supplies usually requires you place 2 orders
first before approving you for a net 30 account… unless your
D&B profile is established
• ULine will approve you for an initial vendor account if you
have two good trade references and at least one good bank
refrence

33. Monitor Your Credit Building
• You’ll need to know how many payment experiences you have
established before trying to apply for store credit
• So get and review your business credit reports as you go to
watch your credit being built in real time
• You can go to the bureaus direct for credit monitoring, or
checkout our discount links here www.creditsuite.com/reports

34. Get Revolving Store Accounts
• Once you have 5 payment experiences reporting, next you can start to
secure revolving store credit cards… for your EIN
• KEEP IN MIND, all applications will ask for your SSN… but you do NOT
need to provide your SSN on the application
• If you do supply your SSN, they WILL pull your personal credit… and if it’s
bad you’ll get denied
• When you leave the SSN field blank, they’ll pull your business credit
• And once they see that you have business credit
established and at least 5 payment experiences
reporting, then you’ll start to get approved for
store credit

35. Get Revolving Store Accounts
• Most major retailers do offer business credit as well as consumer
credit
• Staples, Office Depot, Home Depot, Lowes, Target, Walmart,
Costco, Sam’s Club, Radio Shack, Best Buy, BP, Chevron, Amazon,
Shell, and most other stores offer business credit

36. Get Revolving Store Accounts
• Some sources like Home Depot, might have more stringent approval
requirements and want to see big revenue and 3 years in business for
approval of no personal-guarantee credit
• Costco requires 2 years in business for approval of no PG accounts
• Lowes requires you be in business 3 years for no PG approval… unless you
have good established credit
• Best Buy requires you have established credit to get approved with no PG
• Amazon will also require a PG if your credit is unestablished

37. Get Revolving Store Accounts
• Most stores will give you no PG credit, IF you have your
business credit established
• The key is to have a credit profile and score established, or you
won’t get approved for no PG credit at stores or with banks
• Remember, a PG is needed when credit isn’t established
• But once it is, you can get approved with most sources
regardless of your size or time in business, except for a few
exceptions

38. Get Revolving Cash Credit Accounts
• Once you have a total of 10 payment experiences reported to the
business bureaus, then you can start to get cash credit cards
• Cash cards are those issued by Visa, MasterCard, even AMEX, and are
cards you can use anywhere, not just cards you can only use in one store
• It’s recommended that at least one of your 10 payment experiences has
a high limit of $10,000 or more before applying for cash credit
• Dell is a revolving store source who regularly approves business owners
with established business credit for an account with a limit of $10,000 or
more

39. Get Revolving Cash Credit Accounts
• Key Bank, and Home Depot are two sources that offer revolving
cash credit cards you can use most anywhere
• Many banks offer these also
• Just keep in mind, before applying you MUST have at least 10
payment experiences… and once account should have a limit of
$10,000 or higher

40. You did it!!!
• When you follow these steps, your business can have an
established business credit profile and score
• This profile and score can then be used to get you credit in your
business name, regardless of your personal credit, and without
a personal guarantee
• Then you’ll want to continue building business credit, applying
and getting more credit, using that credit, and getting approved
for higher, and higher credit limits

41. Learn more about business credit at
www.CreditSuite.com/businesscredit
Ty Crandall
877-600-2487
ty@creditsuite.com