Siobhan Says: Stop Saying “I’m Not Paying Myself” (and Start Getting Funded)

Dear Frustrated,

While your commitment to reinvesting is more than honorable, there is a major communication gap between you and your lender. You are speaking the language of sacrifice — “Look how hard I’m working and how much I’m giving up.” They are speaking the language of sustainability — “Can this business survive, grow, and pay back what it borrows?” These are two completely different conversations, and right now, you’re talking past each other.

When you say, “I’m not paying myself,” you mean you’re dedicated. The lender hears: “This business doesn’t generate enough revenue to support even one person’s basic needs” — which to them signals a viability problem, meaning they’re questioning whether your business is actually built to last or just running on your personal sacrifice. Lenders don’t invest or loan to businesses that aren’t sustainable or viable; they invest in businesses that prove they can repay their investors/lenders while also paying the business owners.

The Reality Check

You likely are paying yourself — you’re just not calling it that. If you’ve transferred money to your personal account, used a business card for gas or groceries, or had the business pay your phone bill, you are paying yourself. These are called owner’s draws — informal payments from the business to you as the owner. When you tell a lender you aren’t paying yourself while these transactions exist, they see a disconnect in your financial story that makes them nervous. 

Think about lending money to a friend. If you know they aren’t making enough money to be able to pay their own bills right now you probably know you won’t get your money back. If they have a really clear idea of what and why they need your money and how they’ll repay you might consider it.

To a lender, unclear financials = unclear risk, and unclear risk = denial.

Shift your framework: Paying yourself isn’t selfish; it’s proof your business works. Try these scripts instead:

• If taking money or using money from your business for personal expenses but it’s not documented or separated in any way, make a goal to change this! If you’re working with a lender and you need support, as for it. Most small business lenders want to know that you are eager, ready and willing to learn and improve.
• If taking money informally: “I’m currently taking owner’s draws of about $1,500 per month. I’ve structured it this way for flexibility, and it’s fully accounted for in my financial planning.”
• If taking less than what you think you should be “paid” to run your business or the market rate: “I’m taking $3,000 monthly, which is below my market value of $5,500. I’m strategically reinvesting that difference into inventory, with a plan to hit market-rate pay once we reach $10k in monthly revenue.”
• If truly taking $0: “I’m covering personal expenses via savings/my day job or part time job while building to a specific revenue milestone. My projections show I will begin taking a $3,500 salary in October IF I’m able to get capital and grow my business to increase my revenue.”

Your 5-Step Action Plan

1. Audit Reality: Review three months of statements. Total every dollar that went from the business to you. What are all of the things that the business pays for that support your day to day life? Even if they are also business expenses, take note of them.
2. Know Your Worth: Research what your role pays in Detroit (use Glassdoor or Indeed). This is your target. Ask for help or figure out how much you’ll need to make in revenue (each week/month/year) to be able to pay yourself your worth. This is your revenue milestone.
3. Create a Timeline: Map out exactly which revenue milestones will trigger your target pay and your next “raises.”
4. Practice the Language: Say these new phrases out loud until they feel natural and confident.
5. Get a Second Set of Eyes: Bring your statements to a DNEP Accounting 1:1. We’ll help you find your numbers and go through different ways to talk about them.

You’ve done the hard part of building a business. Now, let’s make sure you’re speaking the language that gets you the resources to grow it.

With respect for your hustle, Siobhan

Disclaimer

This article is written for information and educational purposes only and does not constitute legal or financial advice. If you have questions about your specific situation, please consult your CPA, attorney, or tax advisor.