Al Pacino, in playing Michael Corleone in “The Godfather,” immortalized the phrase, “It’s not personal, it’s just business.” For small businesses, the line should be slightly modified to “it’s not personal, it stays business.”
The biggest mistake I see in representing business owners is made by the small business owners who try to separate their business from personal assets frequently fail to notice that they are personally liable on “business” credit cards. These business owners also fail to notice that their business bank can set off against their personal accounts at the same bank.
Lessons I have learned from watching the mistakes of others:
1) Don’t fnance your business on your credit cards;
2) Keep your business banking separate from your personal banking;
3) Try to protect your personal assets when you are still solvent;
4) Try to avoid unlimited personal guarantees
Remember, your bank is always worried about the possibility of your small business going bankrupt. A small business owner should think about this too from the day that they open the business.