A recent article, 5 Stupid Small-Business Finance Mistakes to Avoid in 2016 by Steve Nicastro says that approximately fifty percent of small businesses don’t survive in the first five years according to the U.S. Small Business Administration because of poor financial forecasting and management.

Here’s a list of small-business mistakes to avoid in 2016 to stay afloat in the next five years. 

  1. Borrowing money with higher APR than ROI

Business owners should only utilize debt financing if they are certain they’ll earn a higher rate of return (ROI) than what the debt costs. 

If you’re paying a high APR, it may be time to repay the remaining debt if you can afford or refinance into a lower fixed-rate. 

  1. Poor personal credit

In a creditor’s view, poor personal credit says you don’t manage your finances right, so most likely you won’t be able to handle your business finances.

Improving your personal credit score can increase your chances of receiving small-business financing.

  1. No revolving line of credit in advance

As a small-business owner, having access to extra funds is critical for emergencies like a leaky roof or broken equipment.

A business line of credit gives you access to cash that you can borrow as required. 

  1. Combining personal and business finances

Mixing your personal and business finances is a grave mistake, here’s why:

  • Budgeting and tracking business expenses can be horrible.
  • Creditors may think you’re not serious with your business.
  • You may not be able to differentiate business and personal expenses. 

Keep a separate business bank account and credit cards for your business. 

  1. Failure to shop around for financing

58% of small-business owners do not shop around when looking for small-business loans online according to survey.

It doesn’t hurt to see what your options are.  If you don’t qualify for a bank loan then you can go to online lenders. 


Learning these mistakes to avoid and reaching out to other small business owners about their insights and experiences can lead you to the right path of success. YourOffice offers you a wide choice of office and workspace solutions: flexible office space, team office space and virtual office packages. You’ll have access to a complete array of office support and concierge services as well as state-of-the-art business technology.

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