More small business owners are dipping into their own pockets, according to a new survey from digital banking platform Bluevine. Small business financing challenges are often driven by gaps in preparation and financial literacy rather than a lack of available capital, according to the study. Business owners said 25 percent of their recent financing applications were delayed or denied because of avoidable application mistakes, prompting many founders to compromise their personal financial health.
While roughly two-thirds of small business owners applied for a business line of credit or term loan during the past 12 months, most skipped fundamental preparation steps. The survey found that 73 percent did not research lender approval requirements beforehand, 72 percent failed to update their financial statements, and 56 percent did not check their business credit score before submitting an application.
Those preparation gaps frequently forced owners to rely on personal financing to keep their businesses operating. Seventy-five percent of respondents said they used personal credit cards or personal loans for business expenses during the past year, up sharply from 49 percent in Bluevine’s 2025 survey.
“Using personal credit cards for business expenses can create risk beyond utilization,” said Aditya Narula, senior VP and GM of Lending and Credit at Bluevine. “It can blur personal and business finances, limit the owner’s ability to build business credit, and make tax or cash-flow tracking harder. Over time, it may constrain personal borrowing capacity for a mortgage, car loan or emergency needs. A stronger application starts before the application itself.”
Business owners whose companies are five years old or younger reported the greatest challenges. More than half (54 percent) experienced issues with their most recent financing application, compared with 24 percent of businesses that were six years old or older. Additionally, 44 percent of newer owners relied on personal credit cards, while 20 percent used personal loans for business needs.
The report also found that relying on personal credit is affecting owners’ personal finances. Among the 41 percent of respondents who currently use personal credit cards for business expenses, more than 4 in 10 said it has negatively affected their personal finances. The impacts included increased personal credit utilization (23 percent), household stress or conflict (16 percent) and lower personal credit scores (12 percent).
Among the 37 percent of small business owners who encountered roadblocks during their most recent financing application, 12 percent were caught off guard by processing times, 11 percent discovered their credit score was lower than expected and 8 percent applied without understanding lender requirements.
The report also found that access to business financing remains critical to operational health. Sixty-eight percent of small business owners said having a dedicated business line of credit or term loan significantly reduced stress about covering upcoming expenses or emergencies.
