Does Personal Finance Affect Ability To Obtain Business Finance?

[LucidCaledonia]

I've never needed any business loans, but it has made me wonder whether your personal finance affects your ability to obtain business finance?

 

[St Rhenium]

Without doubt, although it depends on the kind of financing, the amount and the provider to what degree. If you build up a reputation for throwing money away nobody is going to touch you with a barge pole just because it's for a business this time

 

[MarkB]

There will be occassions, especially in the early days, that you will be required to give a personal guarantee on any business loans. So to an extent your personal circumstances could impact your business's ability to raise funds.

 

[selfemployed]

I totally agree with the comment above - in the early days of your business you will likely be asked to give a personal guarantee on business loans. If your credit rating is not up to scratch then you might struggle - rightly or wrongly you might still be paying the price for past financial issues.

 

[Needhelp]

As mentioned above the vast majority of new businesses who apply for finance will no doubt have to obtain some kind of guarantee from directors/business owners. This is not too bad as it means that all parties have "skin in the game" and will do their best to make it work.

 

[selfemployed]

If you put yourself in the position of lenders, unless there is a degree of risk for individuals, what other motive is there to really really push their businesses?