How to get a Personal Loan for your business?
May 29, 2019
Learn more about how you can get Personal Loans to start a business.
If you’ve decided to start your own business, you will require some financing upfront. In such a scenario, most people think about applying for a business loan. But, getting a business loan for a business that hasn’t yet started is next to impossible. A business loan lender asks for many requirements like age of business, your entire business plan, your business credit score, etc., and such details cannot be given for a business that hasn’t yet opened its doors. The next option is to look for investors, which is also not very easy for start-ups. The only other option that you’re left with, is to apply for a personal business loan. Read on to find out more about how to get a loan to start a business.
Why take a Personal Loan for business?
A Personal Loan for business purpose is easy to get, quick and you are required only to maintain a good personal credit score since no collateral is required. A Personal Loan is basically lent to an individual and he or she can use it for whatever they see fit, like hospital bills, wedding expenses, and in this case, to start or grow a business.
Requirements for a Personal Loan for business
- High credit score
- Low debt-to-income ratio
- Steady income
As is evident from the requirements, it is much easier to get a Personal Loan for business start-up, than an actual business loan. A business loan lender requires you to furnish time of business, annual revenue, business credit score and other such details that you will be unable to provide if you haven’t started your business.
Uses of Personal Loan for small business
How does one make use of a Personal Loan for business start-up? If you haven’t started it, then the first priority should be to use the Personal Loan for start-up costs. This might include your office premises rent, equipment cost, employee hiring costs and others. You can also use your Personal Loan for marketing and advertising to expand your existing business.
How to apply for a Personal Loan for business?
The process of applying for a Personal Loan for business is quite easy and quick.
Step 1: Calculate your requirements, find out how much you want to borrow to kickstart your business endeavour.
Step 2: Do your research. Nowadays, there are many online websites that help you find your credit score and eligibility. Visit these websites and find out whether you’re eligible for a Personal Loan based on your previous loans and Credit Card payments.
Step 3: Choose your bank or lender. Shop around for the best deals either online or by visiting banks and find out where you can make the most out of your loan.
Step 4: Now that you’ve done your research and chosen your bank, pool all your required documents like previous bank statements, IT return papers, proof of ID and residence and head over to the bank branch to apply for your Personal Loan.
If you followed the bank’s protocol carefully and have a good enough credit score, be rest assured that your Personal Loan shall be approved within a few days. Thus, using a Personal Loan to start a business is more convenient and has a higher likelihood of approval.
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