When running a small business, it’s important that you don’t forget the ideals, principles and objectives that got you started. It’s also crucial that you don’t use a personal line of credit for your business.
There is lots of sage business advice out there. People will tell you “don’t take any wooden nickels,” or “don’t take things too seriously,” and “don’t underestimate the value of good employees.” One of the most important concepts is not to use a personal line of credit for your business. Learn what you should do as an alternative to protect your business and your future.
The Dangers of Using a Personal Line of Credit for Your Business
Going to a traditional bank for an instant business loan can be an exasperating and difficult experience. They expect you to have tons of collateral and a perfect credit score.
If you don’t meet the bank’s strict criteria, you will be denied. However, you need to expand and improve your business, so what can you do?
Many small business owners reluctantly agree to a personal line of credit just to save their company, but this is a mistake. You risk putting your own credit in jeopardy. It also requires you to mix your business and personal assets, which is a recipe for disaster.
A personal line of credit is an unsecured loan from your bank. It typically comes with a higher interest rate than home equity lines. You may also have to pay a fee every time you access the line.
Additionally, if you get behind on payments, your personal credit score is affected. This means you might find it even more difficult to get a quick business loan later on.
What to Do in Place of Using a Personal Line of Credit for Your Business
Don’t use a personal line of credit for your business. Instead, use a business line of credit (LOC) from Financing Solutions (www.financingsolutionsnow.com).
A LOC from Financing Solutions is not secured against your personal assets (unless in cases of fraud). Therefore, if your business goes under, your home and other assets are not at risk. In addition, your spouse or significant other won’t have to worry about any joint personal assets being in danger.
This type of fast business funding is ideal to handle slow sales periods, account receivable gaps and unexpected expenses. With it, you will still be able to make payroll, purchase supplies and repair equipment but not have to sacrifice other areas of your business.
Don’t Make These Mistakes in Your Business
Don’t wimp out on new ideas. Many entrepreneurs start out as innovators but then play it safe when their business is on the line. Your competitors will surely jump on the next big thing so it’s vital to beat them to the punch.
Don’t ignore dissatisfied customers. Many business owners think of unhappy clients as troublemakers who are just trying to get a better deal by complaining. Take criticism with grace and use it to improve your business and build greater relationships.
Don’t run out of cash. When your business needs cash now, turn to Financing Solutions. They will give you the funding you need for inspiration and growth.