Business Credit Card Requirements for Sole Proprietorships |
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A sole proprietorship will operate a business credit
card in the name of the individual owner. A sole
proprietorship is not a legal entity separate from the owner himself.
Instead, the business owner maintains "sole" record over all assets and
liabilities of the business. Therefore, to get a credit card for your
sole proprietorship, you must have good personal credit.
Credit Requirements
You, the business owner, are the face of your sole
proprietorship in front of lenders, as well as customers. Your personal
credit should be very high, with a score ideally above 750. In
addition, you must have personal resources, such as a home, car or
other assets, to secure large loans. Small credit lines may be
available with lower asset bases and credit scores.
Other Requirements
Since you are operating the business without legally
incorporating it, you will be personally liable for all loans in the
business name. As a result, the bank will be less concerned with your
business plan than with your collateral and assets. Remember: if you
place personal assets on the line for a business credit card, they can
be seized if your business goes bankrupt. As a result, the bank is
exposing itself to less liability if your business fails.
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