Why is it essential to get rid of your personal debts if you want to run your small business properly? One of the biggest advantages of running a small business is that you can avoid all formalities and technicalities. You can use your personal credit card to make any payment for your small business without being answerable to anybody.
You can withdraw money from your business and repay your credit card debt with no questions asked. This gives you the ability to exploit business opportunities better.
However, this interrelation between small business and personal debt can also work to your disadvantage. If you are over drawn on your credit cards and if lenders are putting pressure, you may develop the tendency of pulling money out of your small business to repay these debts.
This is not a smart move because the money that you have earned from your small business, which ought to be reinvested in the business, will be pulled out of the same. Sooner or later, you will find it difficult to repay your debts on time as well.
Hence, do not presume that excessive debts in your personal life will have no bearing on your small business. If your lenders are prepared to offer generous settlement for your personal credit cards, you should make use this not only to improve your personal finances but also your small business finances.
If you manage to get rid of your personal credit card problems, you can start using the same for your business again. This will help you steal a march over all other competitors who are still struggling with debt. Of course, a personal bankruptcy will have an immense impact on your small business as well.
Considering the complex relationship between your personal and your commercial finances, … Read the rest