So you’re looking to fund your business and you don’t know where to start. There are quite a few ways to raise capital for your business but business loans and/or investors are the most common. Understanding how your personal money habits can affect your business finances is key to your success!

The thing to remember is that when you’re a new or small expanding business, both investors and banks will want to assess your credit worthiness. And even if you don’t think your personal credit should matter, it might have more of an impact than you think.

If you’re a sole proprietor, it’s a good bet that banks and other lenders will reference your personal credit. They’ll do this to see how well you manage debt.

In fact, many lenders review your personal credit before extending business credit. This is especially likely if you sign a personal guarantee when taking out a small business loan. Or, when opening a business credit card. But be careful if they want you to personally guarantee the loan or line of credit. A personal guarantee basically ensures you’ll be personally liable for the debt. This is something you’ll want to avoid, as it could put your personal assets at risk.

funding ideas to help expand your business - Tiffany Nicole Forever Blog

getting a loan from a lender

Loans can be a good option for expansion or updating.  If you’ve never had a business loan before, banks will likely assess your personal finances along with your business books. Personal loan companies won’t be what you’re looking for. Look for local banks that have a strong reputation for loaning to small businesses and startups or even credit unions.

If at some point you had difficulty with your personal credit and need to improve a few things, look into credit repair, debt consolidation, or companies like – BEFORE you start applying for business credit. These companies/services can often help with providing you with the resources you need to settle your debt and move forward with your business. 

options to consider when trying to fund your business idea - Tiffany Nicole Forever Blog

don’t forget that you also have the option of forgoing banks altogether and looking to investors instead

Investors will only invest if they trust the numbers. Their goal is always to make their money back… plus some. One of the best ways to show investors that your business is being run properly is you being willing to invest something. If you have skin in the game, your business will be more attractive to potential investors.