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The Need For Separate Credit For Business

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.

This is a very common issue that comes up for owner's of small businesses, and one where too many of them make a dangerous mistake. They don't realize that when the two of them are connected that they could end up losing everything. I agree that it can be a major blow to lose your business. Yet you certainly don't want to further compound the issue by losing your home and your car as well.

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.

Finally we found a creditor that understood why we wanted to have our small business finances separate from our personal finances. They gave us both a business credit card and a line of credit. They had small limits but still we were able to establish credit in the business name. Ten years later we still have the same creditor for those accounts. They have increased our access to credit and we have unbelievably low interest rates on them.

It can be very exciting to finally make your dream of having your own business a reality. Yet you need to understand that even with the very best of intentions it can fail. There are too many variables in the world that you can't control. By being responsible though with your personal credit and protecting it you can move forward with your plans. You will still have some risks but you will feel better knowing everything you have isn't on the line.

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 will become a regular habit to keep your small business and personal finances separate if you do it from the very beginning. You need to have a solid plan in place so that you can segregate the two of them. It will be more time involved initially but soon you will get a good system in place to take care of it. You need to be willing to heed this information if you want to protect both your business and your personal assets.

Don't be a fool and simply assume that your small business will do well so you don't need to worry about any of this. I wish you the very best success and hope you do well in what you pursue. Yet it is the wise small business owner who understands the risks that are worth taking and those that aren't going to be a part of the path he walks along.

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Robert Bain writes about how to build corporate credit the smart way, and avoid the common small business financing disasters. Don't reprint the same version as everyone else. Get your own unique content corporate credit article here.

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