If you are thinking of starting a small business but you don’t have an established business history, getting a business loan outright would be difficult. When that’s the case, taking a personal loan is an option worth considering. Giving you the opportunity to build your credit history.
One advantage to personal loans is they tend to come with lower rates as well as lower qualification threshold. On top of that, because personal loans are underwritten based on your credit score, you can include other income sources to supplement the early days of your small business.
There are however, some drawbacks to taking on personal loan for small business ventures.
A. You cannot get tax credits on you interest payments
B. Lenders might ask for collateral in the form of your personal assets
C. It’s great for the early days as the amount tend to be much smaller than a business loan
D. It puts your credit score at risk
Keep in mind that when lenders are reviewing your application for a business loan, they will look at your personal credit score to gauge how you will manage your business finances. If you apply for a personal loan, make sure that you are able to meet the obligations.
As the name implies, it’s all about your personal credit score. Still weighing your options? Connect with one of our highly experienced funding managers to find out if personal loan is the right choice.
Ready to get your new venture off the ground? The process is simple and straightforward, use our application platform to compare the options that are available for you.