What to Understand When Using Personal Funds for Your Business

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Back to using your personal funds

Running a small business usually always goes two ways. One, your business is booming and making much profit; two, your business is struggling and finding it hard to cover expenses and other necessities.

If the second situation is relatable, then there's a high chance that you may have reached a point where you are considering dipping into your personal funds to solve those money problems.

In any case, there are 3 things you should know so that you don't complicate your business's finances in the long run.

The money is a loan from yourself.

Whatever money you take from your personal account should be considered borrowed money; why? This way, it's easy to tell where the money came from when compiling financial reports.

This way, you can remove the struggles of paying excessive and ridiculous amounts in interest for loans taken from financial institutions.

The money could put your finances at risk.

Again, it's okay if you think that dipping into your personal funds would give you and your business expense peace. But you should know that there are two sides to it because it could become something you start to do too often, Which could potentially ruin many things for you–you are probably keeping this mindset that a better month would come or a more significant profit is on the way.

This puts your savings, extra cash for investment, and retirement plan at risk, as you could get carried away with spending so much money that your business does not have.

An easy way to help your business find a balance between your personal fund and business funds is to opt for a Kippa payments business bank account. With Kippa, you can now create a free account number for your business. An account number that carries your business name will make you look very professional and let your customers see that you mean business. (or don't you?)

The money could subject your business to a slow growth

Many businesses aim to grow into something bigger, but they don't have the funds for it; if you're buoyant enough to dip into your personal savings, that could be good for your business. We are saying that if you can fund your business growth and expansion, you may have found a loophole to remove the burden of debt in your business finances.

If you don't get outside funding, your growth might be a bit slower with the size of your funds, but it's not necessarily a bad thing, honestly.

How can Kippa help you grow better? It is a simple to use business management app that helps your business realize tremendous growth and sound financial management. Especially if you are trying to grow your finances, you need a profit and loss management app. The cash book and financial reports can help you track every naira your business sends or makes. The invoicing feature can help create professional invoices and the debt feature could also help your business collect any money that your business is owed 3X faster.


Be very careful about using personal savings; it's not a bad thing—it has its pros and cons if you understand what to do. But you should know that you should consider spending your personal savings after you have exhausted all other options in times of financial crisis. Because combining your business and personal funds can backfire very quickly. Keeping your accounts separate can give you and your business the best chances of financial stability and overall success.

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Hafeedoh Balogun

Hafeedoh Balogun