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How Personal and Business Credit affects your Business
When starting, building, or growing a business, small business owners have two options in obtaining their financing. One way to obtain your capital that you can use to finance a business is by surrendering a portion of your business to an investor or investors, or giving up an equity stake. Of course another option to obtain your capital is to borrow or obtain debt financing. As it relates to debt financing there is both secured and unsecured financing. Debt financing is the low cost means of financing a business; however, when it comes to debt financing your business and personal credit profile becomes vital.
The root of the problem is that small business owners rarely borrow money the right way and this is so common because nobody is training them on the right and wrong ways to obtain their financing. When small business owners do things like using the wrong credit cards they will damage their credit profiles, limit their ability to get additional financing, miss out on tax benefits, fail to separate personal & business credit, etc.
Your personal credit and business credit are assets that, when managed well, will allow you to grow quicker and more efficiently. You will obtain more financing with good personal and business credit than you would without them, and you’ll also get that financing at better terms. Additionally, when they are managed properly, you will maintain a separation between your personal and business credit.
When a small business personal and business credit files are managed properly small business owners can acquire working capital and appreciate the 6 benefits of obtaining funding for your small business the right way. Imagine being able to borrow $100,000 or $200,000 or more at the lowest possible cost.
Understanding the principles of business and personal credit allows small business owners the ability to seek the right financing options to start, build, and grow their business. Download this strategy guide now to help make the right decisions to protect and improve your business and personal credit.