Most businesses have experienced the odd financial struggle or two. Personal finances have also seen a few problems in recent years. This is why more and more of us turn to lenders for help to get out of these tricky moments. It’s about cash flow. More is going out than has come in. We need something to bridge the gap. It happens in business when clients fail to pay on time, and suppliers demand payment on shorter terms.

When it happens in your personal life, there might be far more at risk. Your home may be at risk if you don’t keep up your mortgage repayments. Your essential utilities like heat and water can be cut off if you don’t pay your bills. And if you don’t have the credit left over to put food on the table, your entire family can go hungry. By this point, you’ve accumulated a few bad marks on your credit score, and borrowing suddenly becomes much more expensive.

So how can all this affect your business borrowing? Your personal financial history is often taken if you own a small company. This means you are personally checked so the bank can determine if you’re a good payer. If you have a history of missed payments, defaults or a bankruptcy, you’re going to struggle to find funds for your business.

Private investors might also demand your personal financial records. You are not under any legal obligation to hand them over, but chances are you won’t get your investment. Even if your business has a proven track record, your problems might get in the way of borrowing. You might have started a zero-outlay company, but that will need a cash injection to grow at some point. So what can you do?

Time is required to clear that history. Some say that six years of financial history are easy to see if you check your credit. Of course, six years is a really long time to wait if you need finance now! In the meantime, you can look at clearing all debts as quickly as possible. Start by checking how much each credit card and loan is costing you. Sometimes it’s worth finding help consolidating debt into a single loan that has smaller monthly repayments. Finally, check the overall cost of that loan is cheaper than continuing with multiple debts.

Make sure you’re paying your utility bills and telecoms bills on time. Anything with a contract usually involves a credit check. That means missed payments can be marked on that report against you. Budget carefully to ensure you never miss a payment. If it’s too much money, consider a different supplier and lesser package that you can afford. Live within your means. This might require you to earn a little extra income from other sources for a while.

Some lenders are more interested in your company history than your personal background. Peer loans and some business loans might suit your circumstances better. Of course, it’s worth practicing healthy spending at home and work if you need to borrow money.