In the past during good economic times you may have become accustom to using personal credit cards to finance purchases, equipment, and even payments to suppliers or vendors when starting and operating your business.
Unfortunately times have changed for business credit for small business and what has become a shocking reality to many are the ramifications of what the co mingling of personal credit files for business financing has resulted in.
Many small business owners who have followed the traditional route of personally guaranteeing each and every credit card, business credit line, or loan for business have come to realize that they have put their personal assets and family at risk!
The single greatest challenge during these tough economic times facing small business in America is adapting to change. Less than ten percent of business owners in America know how to truly separate their personal credit from business credit let alone understand how to set up a business credit profile an establish a good rating.
So what is business credit?
It’s the ability to obtain financing under the name of your business entity without using your personal credit or personal guarantee. Business credit should be separate and based on the corporation’s credit worthiness not yours! Recently Entrepreneur Magazine was quoted as saying “You should differentiate your personal credit from your business credit.”