What is A PERSONAL
LOAN FOR BUSINESS?
A personal loan for business is a loan made to you, the individual, based on your personal financials. You can then use those funds towards financing your business venture (or however else you’d like).
What Do I Need to Qualify?
580+ Credit Score
Disclaimer: These are general qualifications. Other information might be considered during your application.
HOW DO I APPLY?
You can apply for personal loans at your local bank, but a better option might be many of the online lenders offering personal loans, such as Prosper or Avant. Apply to both below.
Personal Loans for Business at a Glance
Most business owners have no idea you can actually use a personal loan for business purposes. A personal loan is most helpful to new businesses without established business credit. Personal loans usually have lower interest rates than most business loans which makes them a great option for startups looking for financing.
maximum loan amount
3 to 5 years
5.99 - 36% APR
Pros and Cons of a Personal Loan for Business
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 have decent personal credit, personal loans for small business could be your best option for financing your business venture.
Your credit score should be above 580 to be considered for a personal loan as this will be the main determining factor of you getting approved or not.
Your business has nothing to do with the application process and will not even be considered.
Most Customers who qualified had
Time in Business
Over 2 year
What documents will I need to apply?
Bank Account Number
Pay Stubs / W - 2s
Personal Tax Returns
How Do Personal Loans for Business Work?
For most startup business owners, getting that first round of business funding can seem like an impossible task.
However, In order to start your business the right way, your going to need enough funds.
So how can you start a business without having an established business already?
One of the best options for a business owner who doesn't have much business credit history or financials to show yet is using personal loans for business.
First it's important to understand that there's a huge difference between "personal loans for business" and normal business loans.
One of the main benefits of using a personal loan for your business is that it's much easier to get approved for a personal loan than a business loan.
How to Get a Personal Loan for Business
When attempting to secure a personal loan for business, your personal credit scores and personal income are a major factor.
In fact your business track record won't even matter when applying for a personal loan.
After all, the loan is being made to you the owner of the business not the business itself. This means it's your sole responsibility to repay the loan.
What does this mean for you?
It doesn't matter if your a W-2 employee working a job who wants to start a business or already a business owner, either way you'll still be eligible with decent credit and income.
When a Personal Loan Makes Sense
If your a startup business with limited financial history or a W-2 employee wanting to start a business and have decent personal credit than a personal loan for business may be the right fit for you.
If your not able to prove your personal income than using a startup funding company to help you obtain stated income business funding may be a better option for you.
What Will a Personal Loan for Business
One major benefit of personal loans over business loans is the cost your going to pay to borrow the money.
With personal loans the interest can be less than half of what you will pay with some business loans.
With interest rates as low as 6.99% for borrowers with excellent personal credit this can be by far one of the cheapest options to fund your business.
The payment structure of a personal loan is also easy to understand.
There are no hidden fees, no complicated documents—just one fixed monthly payment due each month.
The Closing Fee
Some lenders charge what's known as an origination fee and sometimes a closing fee.
However, there are lenders that don't charge any type of fee's at all.
The fee's for a personal loan are usually pretty straight forward though.
You just subtract your closing fee/origination fee from the loan amount you've been approved for, and whats left over is how much you can expect to be deposited into your bank account.
For example, lets say you apply for a $10,000 loan, but there's a $500 closing fee attached.
By the time the personal loan actually hits your bank account, you'll only receive $9,500 ($10,000 - $500 closing fee) but still have to pay interest on the original amount of $10,000.
Personal Loan for Business from Pave
Pave is a personal loan solution devoted to helping you improve your life with a fantastic array of lending options and outstanding service. With low APR rates as well as a credit and background check that is designed to help you find the loan you need.
SHORT CREDIT HISTORY ACCEPTED
LOAN AMOUNT: $3,000 - $25,000
INTEREST RATE: 6.97% to 27.10%
REPAYMENT TERM: 2 - 3 YEARS
Complete on Partner's Site
Personal Loan for Business from Prosper
Prosper is one of the largest and most established peer-to-peer lending providers in the United States, with more than 2 million members and $1bn in funded loans.
LONG TERM LOANS
UP TO 50% DEBT TO INCOME RATIO ACCEPTED