Entrepreneurs understand that they need to keep their business’ finances in order if they’d like to obtain a business loan in the future. However, many are not aware that it’s imperative to keep their personal finances in tip-top shape as well.
There seems to be a major misunderstanding among small business and startup owners about the requirements for obtaining a business loan from a bank. I have seen many entrepreneurs not realize that even if the business is formed as a corporation, they will likely still need to provide a personal guarantee in order to get a loan. That means that their personal credit will affect whether the business gets approved.
Confused about why that’s the case? Watch this week’s video to learn more about why it’s so important that business owners maintain good personal credit in addition to keeping their company’s finances in top shape.