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Personal Loan for Business
For a new business, capital is one of the most important things required. However, quick access to business funding is crucial for any business owner. Usually, most of the business owners go with business loans to fulfill their business finance requirements. But, getting approved for a business loan is not that easy, you need to have proper documents such as business license along with the Profit and Loss statement of your business and IT Returns and many more. Arranging all this in a short duration may take time. Hence, fulfilling your urgent business needs is not possible through a business loan.
However, a personal loan can provide funds to fulfill all your urgent business requirements in a very short period of time. Personal loans are easily available options for self-employed as compared to a business loan or SME loans.
The loan is unsecured and multi-purpose which makes it more favourable for the business owners.
Let us Discuss in Detail How Multipurpose Personal Loans can Help a Business Owner.
As stated above personal loans are unsecured which means they are collateral-free loans. And nothing can be good for a business owner then getting a loan without any collateral.
When you give collateral, you get the loan against it which means in case of any default or non-repayment you can lose the ownership from your property which you are giving as collateral. This is the worst-case scenario, but while taking a loan you should consider all the points.
A collateral-free loan provides you money without risking any of your assets. Hence, you can say that personal loan is a zero risk funding opting option for your business.
A business loan is non-flexible as they allow you to use the funds only for specific business purposes. Whereas a Personal loan has no such limitations. A personal loan provides you the flexibility to use the funds without any restriction. Whether it be your personal need or your business requirement, once you apply for a personal loan no one is going to ask you the reason behind opting it. Moreover, you are free to use the funds as per your requirement. This is why personal loans are very popular among the self-employed and sole proprietors.
Short Turnaround Time
The turnaround time for a personal loan is very short. This is because the loan is collateral-free and hence the documentation work required is minimal which further reduces the turnaround time of the entire process. Instant personal loans are even quicker as the entire process is online. The process is completed within minutes and the loan amount is disbursed in hours. This reduces all the hassles which people face while they apply for a loan and makes fund easily availability in a very short time.
Whereas when you apply for a Business loan, it takes a significant amount of time to be processed and to get disbursed.
Bigger Loan Amount
When you go for a business loan, the loan amount you get approved for depends on the value of the collateral. The loan is approved only after analysing the market value of the collateral. And mostly it is 60-70% of the collateral value.
So if you want a bigger amount for your business and you don’t have collateral personal loans are best for you. There is no collateral required and hence the loan value is also totally independent of it. However, the loan amount depends on your repayment capacity of the borrower. So, with a personal loan, you can get a high amount of loan irrespective of any collateral.