When business funds dried up, many owners tapped their personal savings accounts to stay afloat.
It’s usually a good idea as a business owner to keep your business and personal finances separate. It can help you manage them both better, and can keep you from blurring the lines between your personal life and your business. However, with the lockdown, quarantine, social distancing, and other safety precautions, many businesses have taken a major financial hit in 2020.
Creditcards.com conducted a survey and found that 35% of small business decision makers say they, or the business owners, have dipped into their personal funds to keep the doors open during the COVID-19 pandemic. That includes 24% who say they used a personal credit card for the money, and 21% who said they pulled from a personal savings account.
The survey also found that 70% of small businesses depended on a Paycheck Protection Program loan, a business savings account, a business credit card, or another kind of loan to make it this far. In order to stay open through the end of the year, the majority said they would need more assistance, or an increase in sales.
Ted Rossman, an analyst for creditcards.com says while it is commendable that business owners would take on that extra financial responsibility, it worries him that they are putting their personal finances at risk doing to.
►Make it easy to keep up to date with more stories like this. Download the 13 ON YOUR SIDE app now.
Have a news tip? Email email@example.com, visit our Facebook page or Twitter.