Contributing equity shows that you are personally vested in your business. Lack of personal equity is a red flag for lenders, who want to see that potential clients believe in their venture and are willing to invest their own personal finances to help the success of their business. If you’re lacking personal funds to invest into your business, consider MBO’s Impact loan program. As a government-backed loan, Impact is considered personal equity when other lenders evaluate your business for financing.
Managing your business debt and loan repayments can seem daunting, especially when you are repaying various sources of financing. Entrepreneurs should maintain an open and honest relationship with their lenders, even during financially challenging times. It is also good practice for business owners to be stay involved in managing their finances, and not rely solely on their accountants for updates on their financial situation.