Best Practice: Creating and growing a brand requires capital. Getting a personal loan may be easier to get for a start-up business.
Today’s Article: Access to Capital – Personal Loan
Getting a personal loan may be easier to get for a start-up business, especially if an applicant’s credit score is lower than the bank requires for business credit. Personal loan can be a unsecure loan, a secured loan or equity line in a home.
Advantages of Personal Loan
1. Easier to get for a startup business
2. Important option if the credit score is lower than required for business credit
3. May already have working relationship with a funder or equity in a home
4. Borrowed money can be used for whatever you need and buying products or services
5. Have a structured flexible payback period
6. Way to establish credit or improve credit score for a future business funder
Disadvantages of Personal Loan
1. Debt that a business has to repay – creates more overhead in your business
2. Applicant needs to have good credit and may require running a credit report
3. Late-payment or delinquency penalties can be very expensive
4. Access to personal credit is more limited with lower credit score or at a higher fee
5. An outside lender is now involved in your company – choose wisely
6. Can take time to secure, application process
Note: If borrowing money against the equity in your home, can put your home at risk.
Action Step: If you cannot get the money you need from other business capital sources, a personal loan may make sense. Look for the best and lowest terms for personal credit. Start with the bank you do business with first and compare to 1 or 2 other banks in the area.
Your brand is your handle. The handle that opens the door to your business, its products and services. Brand Door is always open to you. “Easy access to expert branding”