If you’ve got some of your personal finances mixed in with your business finances, it might be wise to start considering the separation process.

When you start your own small business, it’s easy for your personal and business finances to become intertwined. You may have used some of your own savings to start your venture, or your side hustle has simply grown faster than you expected, and you didn’t get around to opening those business accounts.

Historically, many small businesses have had to keep their personal and business finances tied up together, as the only capital they’ve been able to access has been linked to their home loan or other personal assets.

Previously the only business loan options available to SME’s were provided by Banks who required the business owner to use their house as security for the loan. 

But, thanks to new, business-focused alternative lenders, times are changing, which makes it an opportune time for business owners to consider ‘decoupling’ their personal and business finances. Here are four reasons why it might be smart to keep your business and personal finances separate.


It makes things easier

Beauty is simplicity, they say – and having your business finances all in one place and separate from your personal finances makes things a lot easier to both manage and assess. It enables you to set up accurate bank feeds into accounting software, making tax time a breeze for both you and your accountant.


You could save in the long run

Many small businesses in need of finance may have previously used their home loan to access funds. If you have your business finances in one place, it can be much more straightforward to access business finance.

And taking out business finance can be significantly more tax effective, too.

While you may get a cheaper interest rate by refinancing your business loan into your home loan, you will be paying off a larger loan over a 25-30 year period and you will most likely end up paying more interest in the long run.

It doesn’t dilute your personal wealth

If you have your business and personal finances wrapped up together, not only does it become trickier at tax time, it can also begin to dilute your personal wealth. A $5000 cash injection here, $2500 there and suddenly, your personal savings account looks rather depleted.

It builds your business’s credit history

Finally, if you use business finance, rather than your personal finance, to fuel your business, you’re gradually building your business’s credit history, which could be advantageous when in negotiations with creditors, or when you’re seeking further capital to grow.

Need funds for business growth or cash flow support? 

Contact us or submit your details now to find the right Business Finance solution to help you manage and grow your business.