Now that you know where to get a personal loan for business uses, let’s talk about the logistics for a minute.
In many cases, a personal loan won’t be your first choice for business financing. But sometimes, personal lenders offer a good alternative to business lenders.
For example, if you have a brand-new business, you may have a hard time qualifying for business loans. Yes, you can always try to get a startup loan, but even startup business loans usually require your business to be at least a few months old. So if you’re just getting your business set up, a personal loan might be your best option as a borrower.
Likewise, if you want the flexibility to use your loan for both personal and business needs, you’ll need a personal loan. You can’t use business loans for personal expenses.
Put simply, you can absolutely fund your business with a personal loan. But before you take the next steps to becoming a borrower, make sure you understand how business loans and personal loans differ.
Business loans and personal loans have a few key differences you should understand. These differences can help you figure out which type of loan is the better financing option for you and your business.
As we said, a business loan must be used for business purposes. A personal loan, on the other hand, can be used for both personal and business needs.
The loan application process can be different too. Both personal and business lenders look at your personal credit score. But business lenders will often look at your business credit and your business’s revenue too. Personal lenders, though, will focus on your personal income.
And from a practical standpoint, funding from a business loan goes into a business bank account, while financing from a personal loan goes into a personal bank account.
Plus, as a general rule, business loans usually come in larger loan amounts than personal loans (though your specific loan amount will depend on things like your personal credit, business credit, revenue, and more).