Roughly 60% of all existing businesses continue to use personal loans to fund their growing operations.
While this may not be the most desired way to get a business off the
ground or grow your existing business - it is actually a fact of life.
Banks and lenders just don't like (and thus don't lend) to new or small
businesses.
Given this, if you believe in yourself and your business, you have to
find the capital you need, any way that you can get it - even from
personal loans; because in the end, it really does not matter where the
money comes from.
Pro: Personal loans are
usually fixed rate, longer term facilities - allowing you better
flexibility with the loan as well as providing more affordable loan
payments.
Cons: Personal loans (especially those unsecured) can come with higher interest rates and lender fees.
Pro: Unsecured loans have no collateral requirements
- thus not putting additional burdens on your personal assets. Most
business loans are either tied to a specific asset or require a blanket
lien be placed on your entire business.
Cons: Unsecured loans, again, come with higher rates and higher lender fees.
Pro: Personal loans usually require less documentation.
Cons: Personal loans can impact your personal credit history (positively or negatively).
Pro: Personal loans are usually easier to get approved for.
Pro: Typically unrestricted use of funds!
