We’ve all heard the sayings about “mixing business with pleasure,” warning that business and personal matters could be a risky combination. This is especially true when it comes to finances.
It’s not uncommon for Canadian small business owners to look to personal loans for capital, especially newer businesses that have yet to establish the credit history required by many traditional lenders to be considered eligible for a small business loan.While the temptation to use readily available personal credit for business may be strong, there are some key considerations to take into account first.
Protect Your Personal Credit
The stakes are high when it comes to your business, and often there is more than your reputation on the line. But the reality is that while businesses can come and go, your personal credit history will always stay with you, and will always need to be monitored, managed and maintained. Personal loans in Canada are intended for life goals and major milestones, so making these funds available to your business can be a gamble. Remember, lenders are not the only ones looking at your personal credit – landlords and employers often look at your personal credit score too.
One of the major factors that impact your personal credit score in Canada is utilization ratio – in other words, how much of your total available credit you are using. Obviously, if you are using personal loans and credit cards for both personal and business needs, you may appear maxed out and stretched to credit bureaus. Other credit behaviours such as seeking out multiple loans may raise red flags as well.
Building Your Business Credit Profile
As your business matures and grows, it will become increasingly important to establish and grow a healthy business credit profile. Without a good credit history, your business will struggle to access credit in the future. Obtaining even small loans or low-limit credit cards as early as possible can help you demonstrate good behavior as a small business owner early on. Alternatively, using personal loans for capital does nothing to help your business credit. Original Source...
Contact Us:
330 Bay Street, Suite 306
Toronto, Ontario
Zip Code: M5H 2S8
Business Phone: +1 647 381 9218
Business E-mail: troy.wright@lendified.com
It’s not uncommon for Canadian small business owners to look to personal loans for capital, especially newer businesses that have yet to establish the credit history required by many traditional lenders to be considered eligible for a small business loan.While the temptation to use readily available personal credit for business may be strong, there are some key considerations to take into account first.
Protect Your Personal Credit
The stakes are high when it comes to your business, and often there is more than your reputation on the line. But the reality is that while businesses can come and go, your personal credit history will always stay with you, and will always need to be monitored, managed and maintained. Personal loans in Canada are intended for life goals and major milestones, so making these funds available to your business can be a gamble. Remember, lenders are not the only ones looking at your personal credit – landlords and employers often look at your personal credit score too.
One of the major factors that impact your personal credit score in Canada is utilization ratio – in other words, how much of your total available credit you are using. Obviously, if you are using personal loans and credit cards for both personal and business needs, you may appear maxed out and stretched to credit bureaus. Other credit behaviours such as seeking out multiple loans may raise red flags as well.
Building Your Business Credit Profile
As your business matures and grows, it will become increasingly important to establish and grow a healthy business credit profile. Without a good credit history, your business will struggle to access credit in the future. Obtaining even small loans or low-limit credit cards as early as possible can help you demonstrate good behavior as a small business owner early on. Alternatively, using personal loans for capital does nothing to help your business credit. Original Source...
Contact Us:
330 Bay Street, Suite 306
Toronto, Ontario
Zip Code: M5H 2S8
Business Phone: +1 647 381 9218
Business E-mail: troy.wright@lendified.com
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