The Need For Separate Business Credit
Posted on 2008-Apr-28 at 11:21
When my husband started his own trucking business more than 10 years ago, there was a lot more to it than we ever expected. We got lots of advice, some of it good and some of it not so good. One that we heard over and over again though that we did follow was to keep our business and personal credit separate. After hearing some of the problems that other self employed people we know have had though I am very glad we did.
At first it did seem like one more headache hanging over us. We had to add one more checking account and one more savings account. Pay for the business went into that account and then I had to pay business bills from it, write us a check for income, and put some into savings for whatever came our way. Yet this process really allowed us to see from the start where the business was making money and where it wasn't.
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.
You have to understand that any small business has a great deal of risk associated with it. More than half of them won't make it for the first full year. This is a sad reality that you have to understand when you start a small business. This is why you don't want your personal credit to be associated with it. You may find it hard to move on when your business dreams didn't work out but at least you will still have your car to drive and your home to live in.
Financial difficulties are the major reason that so many small businesses fail. When you have the finances for yours separate from your personal finances you can see the big picture clearly. You won't have a false sense of security that things are going to be fine. This can help you to curb spending on business items that aren't a necessity at this time. Hold off until you have the profits to buy them.
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.
Learn more on Corporate Credit
At first it did seem like one more headache hanging over us. We had to add one more checking account and one more savings account. Pay for the business went into that account and then I had to pay business bills from it, write us a check for income, and put some into savings for whatever came our way. Yet this process really allowed us to see from the start where the business was making money and where it wasn't.
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.
You have to understand that any small business has a great deal of risk associated with it. More than half of them won't make it for the first full year. This is a sad reality that you have to understand when you start a small business. This is why you don't want your personal credit to be associated with it. You may find it hard to move on when your business dreams didn't work out but at least you will still have your car to drive and your home to live in.
Financial difficulties are the major reason that so many small businesses fail. When you have the finances for yours separate from your personal finances you can see the big picture clearly. You won't have a false sense of security that things are going to be fine. This can help you to curb spending on business items that aren't a necessity at this time. Hold off until you have the profits to buy them.
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.
Learn more on Corporate Credit
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