This is a subscriber-only article. Join Entrepreneur+ today for access

Learn More

Already have an account?

Sign in
Entrepreneur Plus - Short White
For Subscribers

Liquid Assets Keep the Credit Flowing Entrepreneurs with asset liquidity will be able to get loans in a tough environment.

By Rosalind Resnick

Opinions expressed by Entrepreneur contributors are their own.

When it comes to managing our investments, we entrepreneurs want what everybody else wants: to make as much money as possible with as little risk as possible.

But as business owners, we also need to take other factors into consideration when making our investment choices. Unlike investors with corporate jobs and 401(k) plans, we may ultimately need to use our personal assets--our house, our stocks, our bonds, our mutual funds, even the cash value of our life insurance policies--as collateral for credit lines and business loans as our companies grow.

That's why it's important to stay liquid; that is, to put our money into the kinds of assets banks can sell quickly if we miss our payments and our businesses go under. So while it might be fun to take a flier on an up-and-coming artist or amass a huge collection of comic books or baseball cards, your lender will be happier knowing you've also got money socked away in real estate, blue chip stocks and other liquid assets that can easily be bought and sold.

The rest of this article is locked.

Join Entrepreneur+ today for access.

Subscribe Now

Already have an account? Sign In