The Need For Separate Credit For Business
Never allow your small business finances to overlap with your personal finances. This is a very serious issue that you need to pay attention to. If you are reading it and then saying that you can make it work because it is easier you need to re-evaluate your attitude about it. Yes, separate finances can be difficult but it can also be very beneficial to both you as a person and to your small business.
My husband is self employed and that is a piece of early advice we got from many directions. We chose to follow it even though I will admit I didn’t want to at first. I figured we could just put all the earnings in one account and pay the bills from it as we had always done. I didn’t want to have to juggle another checking and savings account as I have my hands full as it is!
We did get a business credit card and line of credit early on as well. We got both of them from the same lender which was good for us. Yet the interest rates on them weren’t something I was proud of. I am happy to say though that we have proven to be worthy of that credit. We still have those same two accounts with the same creditor today.
Of course the credit limits have increased while the interest rates have continued to drop. They want to keep us happy and to tell you the truth I am not interested in looking for such credit forms anywhere else. I love the fact that they gave us a chance and that means a great deal to us. Too many other lenders wanted us to use our personal credit and even our home as collateral for such business accounts.
While there are certainly some risks you are going to have to take when it comes to your small business, credit isn’t one of them. No matter how much you believe that your business can be successful, you don’t risk losing your home or your vehicles. You can always go work for someone else if it doesn’t work out. Yet destroying your personal credit it something you will need years to recover from.
Should your small business have a financial struggle you don’t want to lose your home or your car because of it. Even if you do have a wonderful business you can never predict the economy. There are many reasons why small businesses fail so protect what is yours personality from being affected. Should you end up with a very successful small business then that is wonderful but you need to understand there is too much of a risk to blow off the issue.
It won’t always be easy to keep your credit for the small business and your personal matters separate. It can be easy to cave in to the pressure of lenders, especially when you are attempting to first get some business credit extended to you. Yet there is plenty of wonderful aspects of the scenario to continue holding out for.
Never allow your small business finances to overlap with your personal finances. You need to go about things in the right way so that you can make it work for you. No one starts a small business with the belief that it won’t work out for them. Yet that is too often the scenario that plays out. So protect all you have worked for that whatever happens you won’t be jeopardizing your personal assets that you have worked so hard for.
