You’re probably aware that the type of business dictates whether you can be forced to use your personal assets to pay the business debt. Specifically, a sole proprietor will be responsible for business debts, as will most partners in a partnership.
By contrast, the purpose of a corporate structure is to shield those with an ownership interest (such as a stockholder) from personal liability. For instance, those with ownership interests in a corporation, an LLC, and certain other hybrid entities aren’t personally responsible for paying business debt.
Business credit is not nearly as difficult to secure as it may seem. No doubt, it is a long and drawn out process. The important thing is to make sure you understand how to secure business credit for your company as a separate entity from your own personal assets. Your ultimate goal is to ensure that your business credit is tied into the performance of your business.
Don’t allow your personal credit to be used to secure the business credit your company needs to sustain its operations. You must establish business credit on its own, as a separate entity — not tied into any of your own personal assets. So, where do you start?