Small Business Owners Risk Personal Credit to Keep Operations Afloat

A new survey from digital banking platform Bluevine involving 864 entrepreneurs reveals that 25% of recent business financing applications faced delays or outright rejection due to preventable errors. Despite a high demand for capital—with 65% of owners seeking loans in the last year—most applicants bypassed essential due diligence. Over 70% of respondents failed to research lender requirements or update their financial statements before applying, while 56% did not verify their own business credit scores.

This lack of preparation creates a cycle where owners turn to personal resources to bridge funding gaps. Aditya Narula, senior vice president of lending at Bluevine, warns that this practice obscures financial tracking and hinders an owner’s capacity for personal borrowing, such as mortgages or emergency funds. The strain is particularly acute for younger companies; over half of businesses aged five years or younger encountered application hurdles. For many, the consequences are immediate: 42% of those using personal credit for business report negative impacts on their private financial health, including increased utilization rates and heightened household stress.