A new survey from Bluevine reveals that many small business owners have gaps in their business financial knowledge, making it more difficult for them to be approved for loans. More than 1 in 3 small and medium-sized business owners have applied for business credit or a term loan but experienced issues with their most recent financing application.

Knowledge Gaps and Financing Applications

Roughly two-thirds of small business owners applied for a business line of credit or term loan in the past 12 months, but 37% of all owners surveyed ran into a problem in their most recent business financing application. These problems largely revolve around not knowing enough about the application process or being surprised by their financial situation.

Using personal credit cards for business expenses can create risk beyond utilization, according to Aditya Narula, Bluevine senior vice president and general manager of lending and credit. It can blur personal and business finances, limit the owner’s ability to build business credit, and make tax or cash-flow tracking harder.

Best Practices for Small Business Owners

To keep finances separate, small business owners should pay themselves a salary, as if they were an employee. Researching lenders and checking credit scores before taking out any line of credit is also crucial. Before applying for financing, small business owners should have their documentation ready, research lenders, and ask questions to clarify any concerns.

Original reporting: KEYT (Ventura/Santa Barbara) — read the source article.