mistakesNearly half of small businesses don’t make it past the first five years, according to the U.S. Small Business Administration. Optimistic owners may underestimate the costs of starting a business, run up too much debt or have bad personal credit that keeps them from getting a business loan.

Here are five small-business mistakes to avoid in 2016, so you’ll still be around in 2021.

1. Not repaying expensive variable-rate debt

Business owners should only borrow money if they are confident they’ll earn a higher rate of return than what the debt costs. That’s pretty tough to do with credit cards, which typically carry an annual percentage rate in the mid to high teens. APR is the true annual cost of borrowing, including all interest and fees.

If you carried a credit card balance of $10,000 at 18% APR, you’ll have to earn an annual return greater than 18% to earn a profit. The debt is costing you $1,800 in interest annually, and if you make a minimum monthly payment of $200 each month, it will take you seven years and seven months to repay the debt in full. Plus you will have paid more than $8,000 in interest!  

2. Neglecting your personal credit

In a lender’s eyes, poor personal credit indicates you don’t handle your finances well, so you likely won’t handle your business finances well, either. Improving your personal credit score can increase your chances of landing small-business financing.

It starts with making all payments — credit cards, student loans, car loan and mortgage payments — on time; payment history makes up 35% of your credit score. It’s also wise to keep your total debt low in relation to your credit limits, as credit utilization comprises 30% of your score. In general, you should keep your credit utilization below 30%. For example, if you have $10,000 available credit on all accounts, keep your debt at $3,000 or below.