Business owners should avoid using personal assets to finance their business. Managing small business credit well in advance of financing needs puts businesses in a favorable position when a need for financing.
The recent turmoil with the general economy and the reduction in available capital has changed the way that businesses approach and provide credit. Small business owners should understand these changes in order to increase the probability of obtaining business credit.
Establishing and managing business credit is the lifeblood of any small business. Always a challenging task, obtaining funding within the current economic environment and reduction in available capital is even more difficult for small businesses. Many business owners who did not establish small business credit prior to the onset of the recession and could not obtain needed capital were forced to liquidate personal assets and resort to using personal credit in order to continue operating. The first step business owners should take to avoid the need to utilize personal assets in financing their business is to manage their small business credit well in advance of financing needs so that they are in a favorable position when a need for financing arises.
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