 TITLE: What Happens to Your Credit When You Default on a Business Loan? CONTENT: Does a Business Loan Affect Personal Credit?\n--------------------------------------------\nUnder certain circumstances, a business loan default can also affect your personal credit. Here are three factors that may determine whether and how your business loan may impact your personal credit:\n*   **How your business is structured:** If you are a sole proprietor, your personal credit will almost certainly be affected by a business loan default.\n*   **How your loan is structured:** Even if you aren't a sole proprietor, your personal credit may be implicated if you used it to apply for your business loan. Personal guarantees are common for startup loans to businesses that don't have much of a credit history and for Small Business Administration (SBA) loans. If you're not sure whether your personal credit was involved in guaranteeing your loan, check your loan documents.\n*   **How your default is resolved:** If your loan default eventually leads to business bankruptcy and your personal assets are at risk, you may consider personal bankruptcy as well. Filing personal bankruptcy will, of course, have a major impact on your personal credit. You may benefit from consulting with an experienced bankruptcy attorney if you find yourself in this predicament. END