Your Business Deserves Its Own Bank Account — Here’s Why
By Juan Carlos Rosales de la Garza
Many small business owners use a single bank account for both personal and business expenses, often out of convenience or because their operations started small. While this might seem harmless at first, lenders view it as a sign of disorganization and financial risk. Keeping separate accounts is not just a matter of bookkeeping — it shows that you manage your finances responsibly. Lenders want to see that you treat your business as a standalone entity and that you understand how to balance personal spending with business growth.
Beyond the lending perspective, commingling funds creates another problem: it blurs the real picture of your business performance. Take Mary, for example. She owns a food truck and buys her ingredients at a local warehouse that offers great prices. However, she also purchases groceries for her household during those same trips — using the same debit card for everything. When she applies for a loan and submits her bank statements, the underwriter reviewing them cannot distinguish which expenses are personal and which are business-related. As a result, the analysis might incorrectly show that her business is spending too much, leading to a denial based on profitability, even though the business might actually be doing well.
From an underwriting standpoint, mixed accounts make loan analysis challenging. When your business income and personal spending are combined, a lender cannot easily determine whether the company itself generates enough revenue to repay a loan. This often results in delays, repeated requests for clarification, or even denials. Having clean, separate accounts allows lenders to clearly see your business’s financial health, which strengthens your application and increases your chances of approval.
The good news is that separating your finances is simple and can be done right away. Open a dedicated business checking account and deposit all business income into it. Pay yourself a regular owner’s draw or salary from that account, and keep personal expenses elsewhere. Use a bookkeeping tool or an accountant to help you categorize transactions properly. This small change builds credibility, reduces stress during tax season, and shows lenders that you’re ready for responsible growth.
Have questions about business lending or want to suggest a topic for next month’s column? Email Juan Carlos Rosales at jrosales@cedsfinance.org
About the Author: Juan Carlos Rosales de la Garza was born and raised in Mexico and is bilingual in English and Spanish. He holds a BA in Economics from the University of Texas and a Master’s in Finance from Harvard University. For the past three years, he has worked with CEDS Finance, gaining extensive experience in small business lending, underwriting, and entrepreneur mentoring.
