A business can be in a sudden need for finances for various reasons like expansion, hiring more employees, buying equipment etc. In such a case a business owner will think of taking a loan which can be obtained as soon as possible. As a business owner, you will think of going for a business loan or a personal loan since it is easier to qualify for but are they any good? Should you go for a personal loan for business?
Advantages And Disadvantages Of A Personal Loan For Business!
- A personal loan is easier to qualify for as compared to a business loan. If you have a new business, it is difficult to say if any lender would be willing to work with you. In such a case it will be easier to get approval for a personal loan as the lender will only look at your personal credit history and income. There will also be no need for any business plans or documentation like in the case of a business loan.
- In many cases, lenders disburse personal loans just in a few days, so this becomes a better option if you are in need of quick funds.
- Personal loans mostly are unsecured and do not require any security, and so if you are negligent about repaying your loan, the lender cannot seize your assets.
- Taking a personal loan means putting your own credit at risk. If your business fails or if you fail to make your payments, your credit score will get affected and will drop as a result. This will make it more difficult to get approved for any other forms of credit.
- The processing fee is usually higher than the one charged towards a secured loan, i.e. the borrower gets a lower amount than requested. The interest rates of personal loans are on a higher side as they are unsecured.
So even though a personal loan has some advantages, you should always go for a business loan first or approach NBFCs if you need a quick loan, since they have an easy application process, there is no collateral and the loan is disbursed in 3 days or less.
If you are in need of a quick business loan, contact Gromor. Gromor gives unsecured loans at affordable interest rates and has a safe and simple application process. Just visit our website, fill the application form, upload the required documents, and the loan will be disbursed as soon as it is approved.