When To Apply For A Personal Loan Rather Than A Business Loan?
If you are a business owner and require finance for the business then you will no doubt be aware that there are many forms of finance available depending upon what you require the funds for such as the likes of a business loan or a commercial mortgage. Such funding is available from a variety of sources such as the high street banks and building societies as well as more specialist lenders such as peer to peer business lending platforms.
However, if you are setting up a business for the first time and have no track record in running a business and perhaps do not have any acceptable security to offer the lender then you may initially find it difficult to obtain borrowing in the name of your new business. In which case, what could you do?
Well, one option may be to apply for a personal loan through say your bank, building society or an online lender. The interest rate on a personal loan is often quite favourable and is usually fixed providing you with peace of mind if interest rates in general start to rise. You can repay the amount borrowed over a number of years. The shorter the term the less interest you will end up paying back but do bear in mind that the monthly repayments will be more if you repay the personal loan over a year rather than say three years.
Of course, one of the other ways of raising money to help set up a business and possibly a cheaper option than arranging a personal loan is, if you do not have your own personal savings, to borrow from family or friends. They may be prepared to lend you the money without charging you any interest or charge a very low rate of interest.
You may wish to seek advice in respect of the above so why not get in touch with us and we will be pleased to introduce you to an experienced broker who specialises in helping arrange finance for business purposes.