As a small business owner, you are already in a struggle to survive, and adding corporate bankruptcy to the list of things to worry about wouldn’t be a bad thing to avoid. Small businesses are a vital part of America’s economy. Few people actually realize how much we rely on small enterprise.

It is a sad fact that 19 percent of all businesses will fail in the first year, 35 percent in their second, and more than 51 percent by the turn of the third year. Unfortunately, from those that are left, 67 percent won’t see their fourth anniversary. There are a few key reasons for this, including the owner’s business knowledge or business savvy. The lack of a business plan, a poor understanding of professional accountants and lack of capital or access to it are among the top reasons small businesses fail.

Communities rely on small business for many reasons from jobs to supplies and services. The Small Business Association classifies a small business as a business with less than 500 employees, which work out to 23 million independently owned businesses in the United States. In fact, small business is responsible for over 70 percent of jobs in the U.S. Why do they fail? Simple - money! Availability to funds and access to emergency funds or assistance are normally what put the nails in the coffin.

A lack of knowledge of how to use credit and financial training helps to cause corporate bankruptcy. Over 90 percent of small business owners admit to using personal credit cards to fund their business at some point, and more than 65 percent still do use personal credit to fund their operations. Do you know that the bank isn’t the only place to get financial assistance or advice or even grants available to you?

 Take active steps in avoiding corporate bankruptcy. One way to do this is look for “business credit” wherever possible. Now don’t think this will be like applying for your credit card or going to the bank for a loan because it’s not. You need to get and keep up your “corporate credit file.” Finding a corporate credit expert is often a skill in and of its own. Your bank or bookkeeper will more than likely not be able to assist you. Instead, ask some of the other business owners in your area if they can tell you who they use and if they are any good!

A corporate credit expert will be worth his weight in gold. He or she will help you register your business with Dun and Bradstreet. Why is D&B so important? They have been in business for over 166 years, providing businesses with credit and marketing information. Nowadays they reach 240 different countries. If they are talking, I would be listening because this is what gets you a corporate credit history. Why do you care if you have a credit history? Well, it could save you from corporate bankruptcy by gaining you access to a credit line as high as one million dollars in 60 to 90 days. There is your first lesson on preventing corporate bankruptcy.