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Jen
01-22-2013, 12:23 PM
I'm looking to fund my women's online store. I'm looking to get 10k-15k to help with inventory, advertising and web design. Am I better off applying for a personal loan or a business loan?

jim.sklansky
01-22-2013, 02:43 PM
It's your personal business right? So i think you should apply for a personal loan. If this is a sharing business then business loan is better.

Jen
01-22-2013, 05:49 PM
jim, it is my personal business. I am the only one running it for now.

nealrm
01-22-2013, 05:51 PM
If this is a small business, there will not be much difference. You will be required to personally guarantee either loan. Find out which will give you the best rate.

AlexB1
01-23-2013, 09:45 AM
As nealrm said there should not be much of a difference since you will likely have to personally guarantee the business loan. The advantages of a business loan are (a) it keeps your business finances (mostly) separate from your personal finances (which I prefer even if I am on the hook either way) and (b) you can frequently get a lower rate on a business loan because you have assets that can also secure the loan. That said, in the current market it is often easier to get a personal loan.

Freelancier
01-23-2013, 01:38 PM
You get a business loan if you want the business to get the benefit of having a credit history. You'll end up personally guaranteeing the loan, as others have pointed out, but the loan will be in the name of the business, so paying it back will be a bonus to the business' credit history. As you get bigger, that'll turn out to be a good thing for getting larger loans.

phanio
01-25-2013, 01:42 PM
Get the loan that you can - money is just money after all and it does not care where it comes from. The problem here is not where the loan comes from but what you plan on doing with it. Money is just an asset and should be treated as one. You would not buy a store display without knowing that it will benefit the business more than it costs the business. Money is the same way. You should not take a loan unless you know that the money will bring in more money to the business than the loan costs. Other than that, who cares, at this stage, where it comes from. Take the loan that gets approved and move forward.

Business magnate
01-25-2013, 04:30 PM
What are the advantages and disadvantages of a personal loan, and what are the advantages and disadvantages of a business loan?

And most important -- How reliable are the sources of those facts and figures?

You should know answers to these questions before you make a choice.

SocMediaMaven
02-01-2013, 10:01 AM
Jen, I don't know if you have family or not but be sure to consider them before getting a loan. My husband would feel much more secure with me getting a business loan over a personal one. Just a thought...

AvailableCredit
02-09-2013, 06:51 PM
For $10-$15k, why not just hunt around for funds from friends and family? That's much easier than dealing with a bank.

There may be "angel investor" networks in your area- often individuals who finance loans. You can also look around on the Internet for individual lenders. Funded.com, borrowbusinesscredit.com and plenty of other resources are out there.

AlexB1
02-15-2013, 02:17 PM
For $10-$15k, why not just hunt around for funds from friends and family? That's much easier than dealing with a bank.

Agreed. Family and friends first. If those don't work you can look for loans from other members of your community / potential customers. You are going to have a harder time getting a loan from a bank and it will ultimately be a huge pain in all likelihood.

melanie
02-18-2013, 09:51 AM
Getting funds from the bank will be extremely difficult, especially if you are not already trading or unable to prove the businesses ability to generate revenue and is profitable

I would suggest looking for alternative business finance options. Investments, family, friends, cash advances, etc. Good luck.

WilliamN
02-21-2013, 08:27 PM
Depends on how long has the business been online, tradlines established, annual gross income and cash flow.
Lender will want to see at least 3 months current bank statements. There are lenders that will loan without
a personal guarantee with the loan amount your looking at. The benefit is you will not be personally liable with
the business loan it will not affect your personal credit.

moneyguy
06-30-2014, 05:02 PM
Agree with one of the posters that borrowing from friends or family is better than taking a loan..In my opinion it is a big hassle to deal with the banks..if you are still short on cash you can try out sites likes prosper and bankbazaar for loans..

RichardtheFrog
10-22-2014, 04:54 AM
A rate on a business loan would generally be lower than a rate on a personal loan.

LianaCCB
10-22-2014, 02:08 PM
I recommend business credit cards instead of a loan - that's specifically what my clients opt for to fund their start ups or help expand an existing business. With a loan, there's a ton of paperwork and verifications. Tax returns, business license, etc. But if you go with a business credit card you really only need your tax ID number. They'll look at your personal credit, but the business credit won't impact your personal credit report.

smallbizfinancier
01-08-2015, 05:47 PM
Get a cash-flow based loan (based off top line revenue). Many choices out there for small amounts: www.lendingclub.com, www.kabbage.com, www.dealstruck.com, or wwwcancapital.com, www.bankofcardiff.com...the list goes on. All sources provide capital based on revenue, not credit, so worry not about personal FICO scores. Additionally, if you have investors, you only need to provide 51% ownership to qualify in most cases.

You can borrow the money short term (less than 24 months) and make payments daily/weekly, bi-weekly or monthly. Rates start at the WSJ-published USA Prime Rate and go into the mid-twenties.

Always go for the business loan, as opposed to a personal loan. Keep your personal credit separate as much as possible. The next time you need bank financing for a car/home, the last thing you want is to look over-leveraged due to your small business borrowings.

I'm pretty sure that everyone, but Bank of Cardiff lists the the loan on your personal credit. I'm 90% certain that they don't report to personal credit bureaus since it's a true business loan, but they do help build your business credit: D&B, Equifax and Experian business credit.