Fund Your Start-Up Business with a Personal Loan
BY: BERNADINE RACOMA ON MONDAY, JUNE 25, 2018
If you plan on starting a small business, it’s certainly not a small feat. There is much planning required to get your business off the ground. Even if you have a great idea, chances are you’ll need money to start marketing your product. Getting a loan to start a small business can be a bit tricky. Most lenders approve business loans only when you’ve already been in operation for a certain amount of time. There is greater confidence if the business itself has already started and only needs additional capital for expansion. The answer to this dilemma is to apply for a personal loan instead. Certainly, you can use a personal loan to fund your start-up and get the ball rolling so to speak. Keep in mind however that there are greater risks involved in applying for a personal loan. As the name entails, the liability is yours alone.
What are the advantages of applying for a personal loan to start a small business?
Personal loans, in general, have lower interest rates than other types of loans. The application process is also pretty straightforward and quick. In some cases, you can get approved for a personal loan on the same day! Another advantage of a personal loan is that most lenders offer a reasonable payment option such as monthly repayments. Best Online Reviews can help you find the best deals currently available for personal loans. An online comparison is the easiest method you can use to point you to the right lender who can help you get started on your business.
How to qualify for a personal loan
To qualify for a personal loan, you need a good credit score. Somewhere along the ballpark of 700 or higher. You can even apply online for a loan today and get approved in as little as a few minutes. Keep in mind that before you apply for a loan, you must have all of your personal and financial information ready.
When you do get approved for a personal loan and use it for business, certain expenses related to your business can be tax-deductible. It’s important that you’re able to keep track of all expenses related to the operation so that you know which percentage of your interest payment goes towards funding your business, hence, eligible to be tax-deductible.
Other uses for personal loan
Certainly, personal loans can be used for many other things aside from starting a business. People often apply for a personal loan in order to pay off credit card debt or other loans. This is commonly known as loan consolidation where all the person’s debts are managed by one lender. Personal loans are also helpful in times of crisis. Unexpected expenses such as medical bills, the death of a family member or even weddings can be paid off through a personal loan. It may come as a surprise to some, but a personal loan can also help in improving your credit score. When you diversify your credit, it will reflect positively on your credit rating.
Image via Shutterstock