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Growing a business is a lot like raising a family. Initially all aspects of the children’s lives revolve around the parents, but a gradual separation allows the children to one day stand alone. Business finances are a lot like that.

If you’ve been in business for a little while, you’ve probably already taken out at least one business loan. The initial business loan probably came from family members or friends and was used as seed money. They chose to make the loan because of their relationship with you and their confidence in your plan.

If you haven’t gotten it yet, the next business loan will be startup money, and will likely be your first bank loan. Because your business hasn’t yet created its own credit history, your lender will decide whether to lend you the money based on two things: your business plan and your personal finances.

Starting a new business is exhausting and can swallow up its owner’s personal life. Many areas of life tend to get neglected during startup, but if you plan to get a startup business loan, you can’t afford to neglect your personal finances. Bill must be paid on time. Debts must be paid off. Your personal credit score must be excellent.

Once your business is underway, your next business loan should be a line of credit. By the time you make this application, the bank won’t be as interested in your personal finances as they are your business’ revenue and cash flow. Before you apply for your business line of credit, you need to have completely separated your personal finances from those of your business.

To see what the bank is going to see, you must pull a copy of your business credit report. Check first for errors; a recent study found that 30% of all credit reports contained errors serious enough for a bank to deny a personal or business loan. Correct any errors and if you see any negative entries, make every effort to clear them. This can’t be done overnight, so plan ahead and pull your credit report at least six months before applying for your business loan.