Benefits of a personal loan for business
- Not available in: Colorado, Iowa, Vermont, West Virginia
Pros and cons
- Works with self-employed borrowers
- Loan terms of two years available
- Mostly positive customer reviews
- High starting APR of 9.95%
- Administrative fee of 4.75%
- Recently settled lawsuit with the FTC
Easy qualification. A personal loan relies on your credit score, income and current debts – not on your business. Online lenders are especially willing to consider small business owners who don’t meet the strict requirements set by more traditional lenders.
Less paperwork. Unlike business loans, you don’t have to submit much information to the lender when you apply. Your lender will run a credit check, generally after preapproval, and may only require you to send copies of your pay stubs, bank statements or tax returnspared to a business loan, which requires a variety of documents, it’s a much simpler process.
Lower interest rates. If you have good to excellent credit, you may be able to score a competitive APR on a personal loan that beats the rates on all but the largest business loans. This helps you save money, which can be useful if you only need to borrow a small amount.
Same-day decisions. Most lenders will be able to review your application and come to an approval e day you apply. With a business loan, you’d likely need to wait a week or more before learning if your business qualifies.
No collateral required. When you opt for an unsecured loan, the most common personal loan option, you won’t need to provide any collateral or a down payment. This protects your personal and business assets.
Flexible payments. Personal loans offer business owners a variety of ways to make monthly payments. In addition, you rarely need to make daily or weekly payments – something that short-term business loans require. Most lenders also don’t charge a prepayment penalty, so you’re free to pay back your loan when it suits your business without fees.