personal loan vs business loan

[Jen]

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]

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]

jim, it is my personal business. I am the only one running it for now.

[nealrm]

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]

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]

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]

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]

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]

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]

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.