It is very rare that I ever get the time to write about personal finance but after finding out that many of my own business partners are in credit card debt, I just can not avoid it for too long. When writing business plans, it is essential to include the personal finances of the directors in the company especially if it is a new business. Unfortunately for most new business owners, most do not have stellar credit profiles. Most new business owners are either straight from college or have had a few credit issues in their past and as such most omit section on their credit profiles in their business plans.

It is important as a new business owner or when making your business plan to understand that your personal credit profile will affect your chances of getting business finance as well. Lenders are interested to know that the principals in any business can repay any debt advanced to the business. One of the first places they look at is how you as a business owner has performed in your own finances. If you have had bad credit from missing debt repayment plans to bankruptcy , you will have a harder time of getting funding for your projects. One of the ways that business owners go around this is by surrounding themselves with other principals with excellent credit. There is already a cottage industry in the USA where you can hire directors for credit purposes.

It is however not very wise to go around hiring fake company directors as that also reflects on your credibility. A better option would be to prepare your personal finances ready for the day when you do need business financing. Every time I hear Donald Trump talking about the greatest project that man has ever made, it reminds me that even if you had filed for bankruptcy ,one can not lose hope. In the present scenario where homeowners were duped into getting bad loans, business owners are being forced to keep bad mortgages so as to avoid blemishes in their business plans. In my view, I would rather keep my kids fed, than the mortgage company that gave me a bad mortgage. The costs of filing bankruptcy are not that high if you feed your family. After all after 7 years, you will be able to start fresh.

Even though I advocate the screw the mortgage company policy, be very wary of messing up your personal credit profile. Until the day that you are Donald Trump, you should protect your personal credit.

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