is an LLC sufficient to get a business card?

American Express forum. Talk about AmEx credit cards like Blue, Gold, Platinum, Centurion, and more.
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flan
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Postby flan » Wed Nov 20, 2013 9:08 pm

GoCreditGo! wrote:I did not think about business vs. corporate. I guess I would mean corporate. Anyone could get a card they only put business purchases on. That would quality for a business card, but the AMEX corporate cards would be what my question was about.


Unless you've got revenues in the 7 or 8 figure range, you're unlikely to get a credit card issued to a company (whatever its structure) that doesn't require a personal guarantee. The structure of a business doens't matter much for these purposes. The big differences are that business cards don't generally report to your personal credit, and that they're exempt from many aspects of recent credit card reform.


GoCreditGo!
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Postby GoCreditGo! » Thu Nov 21, 2013 11:23 am

Gotcha! Thanks for the info. It's always good to know how "low" we stand :P

DoingHomework
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Postby DoingHomework » Thu Nov 21, 2013 3:33 pm

flan wrote: they're exempt from many aspects of recent credit card reform.


True. But that is basically a BAD thing. Even if you don't like the reforms or "nanny government" in general, it is hard to see how the recent reforms are bad for individuals. Getting a business card means you basically through away a lot of protections for no advantage. I cannot think of a single advantage of a business card.

Midori
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Postby Midori » Thu Nov 21, 2013 3:52 pm

Sevenfeet wrote:The problem is that I can't see her pushing that much money through her card on a consistent basis ($250 a month) or keep $3000 or more in the checking account on average (we have bills to pay).


@Sevenfeet, ugh, yes. BofA's small biz accounts used to be great--- "Just charge one transaction to your business debit each month to waive all fees-- just get yourself a drink from Sonic!" but it changed back in August to the current terms of $250/month debit spend, $3k average or $5k minimum monthly balance. (Still better than Citi, with its minimum requirement of $7k monthly balance for fee-waiving...)

LLC A banks with BofA. When I set up LLC B, I was happy that I had transferred business to a small, local bank that only required a monthly average of $500. Business tends to be slow and steady, but when the reserves get tapped, they get tapped with a vengeance, and I didn't need to feel restricted by BofA's terms, and why pay fees you don't need to? :o)

DoingHomework
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Postby DoingHomework » Fri Nov 22, 2013 11:34 am

whit wrote:LLCs can get credit cards

I'm not sure about Amex but from what I know with how Chase does business credit cards, while you can have one for the business's tax EIN, and under the business "name" it's the owner of the business that is liable. so whether it's members/managers of the LLC or the owner of the s/c-corp, it's taken into account the cardholder's personal social when the application is being placed

nowadays it's rare to have a business credit card that takes the business solely and not take the personal into consideration as well.


Not true. Most sustainable businesses have their own credit. The key point is that they must be sustainable. If you have a solid business plan a bank will lend money against the plan. Then when you begin to execute the plan successfully the business will have its own credit profile within a few months.

I have a very small business. It has credit in its own name without my personal guarantee. This was established by maintaining a bank account and accurate tax records to demonstrate sustainable revenue to creditors. My business in in an LLC.

whit
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Postby whit » Fri Nov 22, 2013 8:52 pm

there's a difference between credit cards for a business and credit (like line of credit)

so I'm not sure what you mean because you highlighted my words speaking of credit cards and then you say business credit

you mean business credit cards or business credit like line of credit that requires tax returns from the business? because I said as much in another reply

you would need to show your business is profitable to get a line of credit or business credit

business credit cards are based on business tax id and also takes personal id even if they don't state so, if you interrogate them you'd know differently--I've also seen businesses that show profit and businesses that deposit well into six figures get turned down because the applicant itself's credit report

ETA understand that different financial institutes have different products they offer..community banks and most big banks in my area..do not offer unsecured personal loans but some credit unions still do and I believe Wells Fargo has something along lines

also if you had it in the past doesn't mean it's available to new customers currently, with regulations and banks having to restructure to meet and still make profit (if they're cut off from elsewhere eg debit cards don't offer cash back anymore..wonder why)

cashnocredit
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Postby cashnocredit » Sun Nov 24, 2013 1:19 am

DoingHomework wrote:Not true. Most sustainable businesses have their own credit. The key point is that they must be sustainable. If you have a solid business plan a bank will lend money against the plan. Then when you begin to execute the plan successfully the business will have its own credit profile within a few months.

I have a very small business. It has credit in its own name without my personal guarantee. This was established by maintaining a bank account and accurate tax records to demonstrate sustainable revenue to creditors. My business in in an LLC.


I currently own an LLC. While Amex would love to provide me a biz card I would have to personally guarantee it. I was a founder in a company that eventually was able to secure a receivables LOC and provide execs and sales with BofA Visa cards with no personal guarantees. It took nearly 10 years of continuous profit and a couple years of audited financials before we were able to get credit without personal guarantees.

DoingHomework
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Postby DoingHomework » Sun Nov 24, 2013 9:37 am

cashnocredit wrote:I currently own an LLC. While Amex would love to provide me a biz card I would have to personally guarantee it. I was a founder in a company that eventually was able to secure a receivables LOC and provide execs and sales with BofA Visa cards with no personal guarantees. It took nearly 10 years of continuous profit and a couple years of audited financials before we were able to get credit without personal guarantees.


It took me about 4 years. They wanted 3 years of tax returns as well as a bank reference and that was about it. We first got a trade account with a retailer then a credit card through our bank. I do not have a business AMEX because I don't want one. I have no idea if they would issue one. But my bank had no problem issuing a Visa in the name of the LLC without a personal guarantee.

cashnocredit
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Postby cashnocredit » Sun Nov 24, 2013 5:50 pm

DoingHomework wrote:It took me about 4 years. They wanted 3 years of tax returns as well as a bank reference and that was about it. We first got a trade account with a retailer then a credit card through our bank. I do not have a business AMEX because I don't want one. I have no idea if they would issue one. But my bank had no problem issuing a Visa in the name of the LLC without a personal guarantee.


We were a relatively slowly growing C corp doing tech related manufacturing. For the most part we didn't need financing and just build capital slowly, mostly from retained earnings but some from equity sales. The Visa cards for execs/sales were secondary frills that came with a large receivables LOC.

Banks would come to us fairly often but always required personal guarantees and that wasn't gonna happen. Then one day BofA approached us to get our business and we just started out saying "no guarantees" and they just said "no problem."

By that time we had a great, stable growth and profitability pattern. LOCs are most useful for periods of rapid growth when you don't want to factor receivables.

That was part of my credit downfall. I stopped using credit for anything. I'd lock car rentals with the company CC and pay for personal rentals with a debit card. After I retired I had an almost totally blank credit report but didn't know it since I didn't use credit for anything and never pulled my reports.

I since fixed that largely so I could rent cars without a song and dance.



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