Personal Loans for Business
Personal loans may actually be helpful for newer businesses that don’t have any financial history. In addition, personal loans can have lower rates than business loans.
Maximum Loan Amount
3 to 5 Years
5.99 -36% APR
As quick as 1 day
What is a Personal Loan for Business?
Personal loans for business purposes can be especially useful for newer businesses without established business histories. If you’re a business owner in this situation, personal loans for business often have lower interest rates than many other business loans you’d typically qualify for.
- Can be much less expensive than a business loan
- Great for customers with limited business history
- Repaid monthly rather than weekly or daily
- Reports to your personal credit history
- Some prefer to separate business from personal finances
- Limited to up to $40,000
Who Qualifies for Personal Loans for Business?
If you’ve got an exceptional personal credit score, personal loans for small business could be an excellent way to finance your new venture.
You’ll need to have a credit score of 580 or above to consider it a viable option. And, nothing about your business will get considered in your application.
Most Customers Who Were Approved Had
Time in Business
Over 2 years
How to Apply
The application process for a personal loan for business will depend on the type of lender you’re working with. Many business owners apply for personal loans from their preferred bank, which will typically have a longer application process.
Others will apply for personal loans online. These lenders will have more streamlined and efficient application processes, only requiring a handful of documents in the actual application.
You Will Need These Documents
- Driver’s License
- Credit Score
- Bank Account Number
- Pay Stubs / W-2s
- Personal Tax Return
How Do Personal Loans for Business Work?
For many entrepreneurs, getting that first stage of financing can seem like an impossible climb. How can you start your business without having enough funds?
Common Funding’s marketplace offers a solution for business owners who don’t have much business history or finances yet: Using personal loans for business.
It’s important to understand the difference between personal loans “for business” and traditional business loans, and to be aware of what personal loans for business require.
Getting a Personal Loan for Business
Personal loans for business very much depend on your personal credit score, your business’s financial track record doesn’t matter.
This is because your lenders are making a loan to you, the business owner, and it’s your responsibility to repay that loan.
Which means, whether you’re using those funds for your business or something else doesn’t affect that model.
When Does It Make Sense?
For small or new businesses that don’t have significant financial history yet, personal loans may just be a perfect fit.
Keep in mind personal loans for business are only really an option if you’ve got a strong credit score, that’s the most important part of the loan application process.
What Will A personal Loan for Business Cost?
There is one great thing about personal loans, their payment structure is easy to understand, it’s a term loan.
No hidden fees, no complicated documents, just you, a lump sum of cash, and a fixed monthly payment.
Paying the Closing Fee
There is a charge you should be aware of: the closing fee. However, It’s very straight forward.
Subtract the closing fee from the loan amount you’ve been approved for, and that’s how much capital you can actually expect in your bank account.
Say you apply for a $5K loan, but there’s a $250 closing fee attached.
Once you’re funded, you’ll only receive $4,750 in your bank account, however, you’ll have to pay interest on that original $5K.