Business loans vs. personal loans for business
As we saw before, the personal loans we handle at Capifinders are exclusively for business use, either to start a business or for a business situation. How do I know which one is best for me?
We share with you the details of each one so that you can evaluate which one best suits your needs.
What is it?
Business loan:
Loans granted to a company. For example, working capital, SBA loans, lines of credit, etc.
Personal loan for business:
It is used for business purposes but is based on personal information.
Requierements
Business loan:
It depends on the product, but generally, it is requested:
One year in business
Legally incorporated business
Credit score (score depends on product)
Personal loan for business:
Credit Report
The first page of personal taxes
Who is it for?
Business loan:
Business owners who want to grow their existing business.
Personal loan for business:
There are 3 profiles here:
Business owners who have complications
Accessing a loan because of their business situation and because it is done with their personal information.
Business owners are looking to start a new business (start-up loan).
Business owners who want to start a business in another industry.
Knowing these simple concepts, you can determine if you need a commercial or personal loan. Now, if you are still undecided about whether to apply for a personal loan, you can take the following pros and cons into consideration:
Pros:
It is easier to get a personal loan than a commercial loan, especially for new businesses that are regularly not approved for traditional financing.
You usually do not have to provide collateral or security.
They are a quick financing option. Commercial loans may take longer to receive offers.
Cons:
You are risking your personal credit.
Interest is not deductible, unlike interest on commercial loans.
If you still need clarification or have questions about these two types of loans, contact us, and we will gladly advise you.
