cancel
Showing results for 
Search instead for 
Did you mean: 

The main appeal of no PG?

wasCB14
Super Contributor

The main appeal of no PG?

I see a lot of people report excitedly that a new business TL doesn't require a personal guarantee.

 

For most people here, is the appeal that you avoid having an account report personally? For instance, reducing the number of new accounts for 5/24-like reasons, as well as the number of recent inquiries visible?

 

Or is it more about avoiding personal liability in the event of a business default? For people with $10k+ monthly auto fuel bills, are you generally giving a PG on any business vehicle loans?

 

For one of my businesses, my fixed costs are fairly low, with variable spend happening as revenue is earned. For the other, there's significant equity in the business with low risk. And I like to limit the number of business accounts for easier recordkeeping. So for me a PG isn't a big deal.

Personal spend: Amex Gold, Amex Schwab Plat., BofA PR+WWFCR, Costco
Business use: Amex Bus. Plat., BBP, Lowes Amex AU, CFU AU
Perks: Delta Plat., IHG49, Hyatt, "Old SPG"
Mostly SD: Freedom Flex, Freedom, Arrival
Upgrade/Downgrade games: EDP, BCP
Closing soon: Discover

Mostly earning MRs and cash back as I use up hotel and airline points spread across several programs.
Message 1 of 8
7 REPLIES 7
cashorcharge
Senior Contributor

Re: The main appeal of no PG?

While I'm sure there's a few different responses to these questions @wasCB14 , I'll share my own perspective:

 

My preference for no PG is really aligned to your first point.  Without a PG, I can acquire more credit that does not pull or report on my personal CB so if balances are carried over or if there's higher than preferred utilization on an account, it does not have any relevance on my personal credit.  This means that not only does it not show up, it's not factored into DTI calculations.  

 

Sure you could say that you're protected from default and that is a relevant point, though I wouldn't say that's my primary concern.

Message 2 of 8
Jimmy_Al
New Member

Re: The main appeal of no PG?

I have several business cards that do require my personal guarantee but do not show on my pesonal credit report. 

 

Although my cards are personally guaranteed, having them without such guarantees would of course be preferable. If the business were to sink I would have the option to abandon ship and not sink with it. How is this not advantageous? 

 

I am not saying I would not honor those debts regardless. I am saying the ability to legally walk away from such debt is beneficial to me. Choice is good.

Message 3 of 8
4sallypat
Established Contributor

Re: The main appeal of no PG?


@cashorcharge wrote:

While I'm sure there's a few different responses to these questions @wasCB14 , I'll share my own perspective:

 

My preference for no PG is really aligned to your first point.  Without a PG, I can acquire more credit that does not pull or report on my personal CB so if balances are carried over or if there's higher than preferred utilization on an account, it does not have any relevance on my personal credit.  This means that not only does it not show up, it's not factored into DTI calculations.  

 

Sure you could say that you're protected from default and that is a relevant point, though I wouldn't say that's my primary concern.


Agree!

 

I prefer a non PG tradeline if I can acquire it.

 

However note that certain business structure can prevent you from getting a non PG tradeline or credit.

 

As a Sole Prop - my business credit is a mix of PG and non PG due to the requirements of how creditors see a sole prop.

 

 

 

 

Message 4 of 8
GApeachy
Super Contributor

Re: The main appeal of no PG?

@wasCB14 avoiding those hp's which may look like excessive personal credit seeking when it's not.  Maybe one third of my hp's are for biz credit.  Last year an Experian csr commented to me that I had a lot of hp's and I said so even you cannot see on your end that a lot of those hp's are for the business side.  That's why I love Amex too.  Getting biz credit shouldn't reflect on your personal as personal credit seeking...but it does.

"My Take Home Pay Don't Take Me Home"
Message 5 of 8
4sallypat
Established Contributor

Re: The main appeal of no PG?


@GApeachy wrote:

@wasCB14 avoiding those hp's which may look like excessive personal credit seeking when it's not.  Maybe one third of my hp's are for biz credit.  Last year an Experian csr commented to me that I had a lot of hp's and I said so even you cannot see on your end that a lot of those hp's are for the business side.  That's why I love Amex too.  Getting biz credit shouldn't reflect on your personal as personal credit seeking...but it does.


Agree !

 

My personal EX has the most number of inquiries (double digits) compared to EQ and TU which is in the single digits.

 

Funny how business cards that PG use EX primarily.

 

Amex is great for SP only if you have a current relationship.

Barclays pulls TU.

Citizen's is SP which is the best!

Message 6 of 8
GApeachy
Super Contributor

Re: The main appeal of no PG?


@4sallypat wrote:

 

My personal EX has the most number of inquiries (double digits) compared to EQ and TU which is in the single digits.

 


Yep! I was so happy to see my Kabbage hp fall off last week!  I always wondered if the Biz FI pulled Exp. personal credit because they also (probably) pull Exp. Biz credit.  But yeah, like you stated, they hammer the h3ll out of Exp.Smiley Frustrated

"My Take Home Pay Don't Take Me Home"
Message 7 of 8
SACT51
Frequent Contributor

Re: The main appeal of no PG?


@wasCB14 wrote:

I see a lot of people report excitedly that a new business TL doesn't require a personal guarantee.

 

For most people here, is the appeal that you avoid having an account report personally? For instance, reducing the number of new accounts for 5/24-like reasons, as well as the number of recent inquiries visible?

 

Or is it more about avoiding personal liability in the event of a business default? For people with $10k+ monthly auto fuel bills, are you generally giving a PG on any business vehicle loans?

 

For one of my businesses, my fixed costs are fairly low, with variable spend happening as revenue is earned. For the other, there's significant equity in the business with low risk. And I like to limit the number of business accounts for easier recordkeeping. So for me a PG isn't a big deal.


Um... The whole point of being an incorporated entity is to seperate personal and corporate everything...

Message 8 of 8
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.