Business Credit Card Requirements for Partnerships |
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When you start a business, you will likely receive multiple
offers for some type of business credit card. These
cards would typically be offered in the name of the business. However,
this partly depends on whether your business is incorporated. As a
partnership, you have the option to leave your business unincorporated.
Then, meeting the requirements for business credit would fall on the
shoulders of each individual owner.
Basic Credit Requirements
The credit of both partners in a business will be considered
when any lender extends financing to an unincorporated partnership. If
one partner owns a larger percentage of equity, the credit of this
owner will be weighed more heavily. However, both should have a record
free of default, delinquency and other credit issues to qualify for the
best credit cards.
Asset Requirements
If an unincorporated partnership fails, the partners will have
to resolve outstanding debts personally. This is very risky for a
lender. As a result, the lender will typical require collateral on any
business credit card. This can take the form of a liquid asset, such as
a business's bank account, if necessary. A further option is for one or
both of the partners to use personal collateral to secure a loan.
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