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What Are The Advantages Of Establishing Business Credit Over Using Your Own Credit?


When Your Personal Credit Has Been Established For A Longer Period Of Time.... What Are The Pro's & Con's??

It's generally a less than good idea to comingle your personal finances with your business finances. It can raise all sorts of red flags with the IRS and other taxing agencies.

If your business really starts to grow, you will probably need to get lines of credit from suppliers and vendors. Those credit managers will want to look at your business financial statements - balance sheet, income statement, statements of cash flow. If it shows that you are using your peronal lines of credit to finance your business, it can get confusing to make an educated credit decision and approve a realistic credit limit for your purchasing habits.

For more information on business credit management (from the creditors' viewpoint) check-out...

http://www.creditmanagementworld.com... Source(s): http://www.creditmanagementworld.com...
easier to keep expenses differentiated
If your business was profitable, you wouldn't need credit at all, you'd need investment advice..
1-It helps you when it's time to file taxes. You can separate your business expenses and personal expenses.

2- Have another credit line for you to use. Put all your business expenses on your personal account, what do you do when the credit line runs out?

3- Some company offers a lower interest on the business card just to lure you in. Also you can earn points and redeem for travel, gift cards, cash etc..

4- Good way to advertising your business when using your business card for purchase. It's a free advertising.
If you are a sole proprietor, actually your personal and business are the same. If your business goes down, with unpaid accounts payable, you will have to pay the business debts from your personal assets.

If you are a corporation, only your business is liable for business debts.
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