Monday, November 16, 2009

Be Very Careful With Your Business Credit

By Dirk Andersen

There are no guarantees when it comes to applying for a business loan. In these turbulent financial times, banks are being extra cautious. So even if you have extraordinary credit, you may still get rejected.

Bank executives have to suck in a little pride nowadays as they are having to admit that they were careless with their clients money. As a result many people are left with nothing due to the bad investments of the banks.

Irresponsible lending and irresponsible borrowing go hand in hand. Banks often lent money they did not have to people who on paper had clean records but in reality could not pay the loans back. This makes for the perfect storm.

One should think twice about accepting a large loan in that you may not be able to pay it back. This would result in bad credit that may haunt you for a long while.

Borrow responsibly and only borrow as much as you will need. Speculating once a common practice for many businesses is now considered to be a faux pas. Always watch your spending habits and ask yourself if you really need something.

Sometimes doing the responsible thing when it comes to borrowing may seem mundane however it is a requirement if you want to see success in the future. Always be aware of what lies ahead and you may be rewarded for it.

You need to get out and get real business credit and stop using your personal credit cards as leverage. I can be the first to tell you that there is a lot of business credit available even in this awful economy. If you start leveraging your personal assets for your business though you could end up broke and homeless. Not to mention stressed out and separated from your family.

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