Business credit cards and personal guarantees

What a personal guarantee is

A personal guarantee is a legal promise to repay borrowing yourself if the business cannot. Santander’s page on the subject describes it as an agreement “to pay the money back yourself if the business cannot”, usually given by a director, member, partner or owner. A limited company or LLP is a separate legal entity, so its owners are not normally responsible for its debts. A guarantee changes that for the specific debt it covers.

Which businesses are asked

Santander is the clearest of the issuers we read. It says it asks for a personal guarantee when it lends to limited companies and LLPs, including on credit cards, and that if you are a sole trader or partnership it will not ask for one. Its stated reason for the difference is that a sole trader’s or partnership’s personal assets can already be pursued directly if the business defaults. Santander also says new directors or members will need to provide a guarantee if the structure changes, and strongly recommends independent legal advice before signing.

Lloyds Bank is more tentative on its card pages: “a guarantee may be needed for limited companies and limited liability partnerships”. Virgin Money says that to lend to your business it “may need a personal guarantee from you or someone else”, or security from the business or a guarantor, and that it may not be able to lend without it. Capital on Tap goes furthest in the other direction: its FAQ states that most business credit cards, including its own, require a personal guarantee.

Can a limited company avoid one?

On the evidence the issuers publish, the honest answer is that we cannot say for most of them. For the majority of the cards in our comparison, including Barclaycard, HSBC, NatWest, Royal Bank of Scotland, Metro Bank, the Co-operative Bank, American Express and the Funding Circle cashback card, the product page says nothing about personal guarantees. Silence is not the same as “none required”. It means you should ask the issuer before applying, and read the agreement before signing. The table below shows exactly what each card page says, and where it says nothing, we say “not published on the product page” rather than guess.

Two things are worth knowing. First, the issuers that publish a position do not describe a way for a limited company to opt out; Santander says it asks as part of the finance agreement. Second, none of the card pages we read invites negotiation of the guarantee, so do not assume an opt-out is available.

What to check before you sign

• What is guaranteed. Is it this card only, or all borrowing the business has with the issuer? The wording matters, and a solicitor should read it.
• Whether it is limited. Some guarantees cap the amount or the period. Ask whether yours does.
• Who signs. One director, or all of them? Santander says new directors must also provide one.
• What happens to the guarantee when the card is closed. Ask how and when it ends.
• Employee cards. Several issuers let you add cardholders at low or no cost. Spending on those cards sits on the account the guarantee supports.

Sole traders and partnerships

If you trade as yourself, you are already personally liable, which is why Santander does not ask for a separate guarantee. Terms differ for these customers in another way too: NatWest and Royal Bank of Scotland publish separate card terms and conditions for sole traders and partnerships of up to three partners and for limited companies and LLPs. Of the cards we compare, those that state that sole traders can apply are the British Airways American Express card, Lloyds Bank, NatWest, Royal Bank of Scotland and Santander. Capital on Tap, American Express Gold and Platinum, and the Funding Circle cashback card state they are for limited companies or LLPs.

Questions to put to the issuer

Because most card pages are silent, the practical step is to ask before you apply, and to get the answer in writing. Useful questions are: Will you ask for a personal guarantee on this card for my type of business? Does it cover only this card or all borrowing I have with you? Is the amount or the period limited? Does it end when the card is closed, and how do I confirm that? Will my co-directors also be asked to sign? Would you accept the application without one, and on what terms? An issuer that answers these clearly is giving you more than most product pages do, and an issuer that cannot answer them is telling you something too. Keep the replies with the card agreement, because a guarantee outlives a casual phone call.

How a guarantee interacts with your credit file

Signing a guarantee does not itself change your personal credit score. The risk arises if the business defaults and the guarantee is called. We cover that in our guide to business credit cards and your personal credit score. For borrowers weighing the alternatives, our guide to unsecured business loans explains why guarantees are common across unsecured lending, not just cards.

This is general information, not legal advice. Because a personal guarantee can put your own assets at risk, take independent legal advice before signing one.

Sourced comparison

Sources

Every issuer figure in this guide was read from the issuer’s own page on the date shown. Terms change, so check the live page before you apply.

• Capital on Tap Business Credit Card (Free plan): capitalontap.com, read 13 October 2026
• Lloyds Bank Business Credit Card: lloydsbank.com, read 13 October 2026
• Santander Business Cashback Credit Card: santander.co.uk, read 13 October 2026
• Virgin Money Business Credit Card: uk.virginmoney.com, read 13 October 2026
• Santander, understanding personal guarantees: santander.co.uk, read 13 October 2026

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