If you have a small business that is in need of a loan, you may be considering a variety of options in order to see which loan is best for you. Conventional thinking would lead you to believe that a business loan should be used for a business. However, that is not always the case. So, the question is, is a personal loan better than a business loan? Here is the answer.
What Loan is Easiest to Get
One of the factors to consider when comparing a personal loan to a business loan is which loan is easier to get. The clear winner in this category is a personal loan which are much faster to obtain. To begin, personal loans come with a lot less paperwork than business loans. A personal loan will rely mainly on your credit and financial history while a business loan may ask for business transactions, future contracts, pending debt and much more. If you are opening a new business, you may not be able to get a business loan since your business has no established credit. As far as simplicity and speed goes, a personal loan is much better than a business loan.
Best Lenders for Loans
Finding a good lender is just as important as finding the perfect loan. You have many more lender options if you opt to apply for a personal loan rather than a business loan. Not all lenders are willing to write loans for businesses. However, almost every financial institution out there will have personal loan options. You can even find a lender for a personal loan online! Oz Money will give you fantastic personal loan options and you can easily assess the loan, look at the terms and requirements and apply right from the comfort of your home. You may very well find a better lender when you look into personal loans than if you are searching for a business lender.
Another point that makes personal loans a better option when compared to business loans is that they are much more flexible when it comes to how you spend your money. Personal loans usually allow you to use the cash however you’d like. On the other hand, a business loan will require you to prove that your purchases are business related, giving receipts and invoices for every purchase made with the loan money. This can be restricting and also time consuming to track. If you want a flexible loan, with the ability to use the money however you wish, apply for a personal loan.
Benefits of Business Loans
Overall, personal loans tend to be better than business loans when it comes to getting cash for your small business. Of course, business loans can have their upsides as well. Getting a business loan will help your business grow its credit and build its financial history. This can help you later on in the life of your business if you need to prove the financial responsibility of your business. However, if this is not a concern of yours, look into a personal loan instead.