<p>Launching your own business comes with a huge price. The startup alone can set you back tens of thousands and you would also require additional funds to grow the business. A lot of entrepreneurs look into loans when they need funding. But there are different types of loans available. Now the choice to make is between a business loan and a personal loan. Each type of loan has its costs and benefits that will impact your finances. This guide will walk you through the key differences between the two types of loans so you can choose the best option for your new business.</p>
<p><img loading="lazy" class="aligncenter size-full wp-image-22509" src="https://tower.10bestbusinessloans.com/wp-content/uploads/2022/11/Man-in-formal-wear-sit-on-chair-armchair-behind-desktop.jpg" alt="Man-in-formal-wear-sit-on-chair-armchair-behind-desktop" width="600" height="400" srcset="https://tower.10bestbusinessloans.com/wp-content/uploads/2022/11/Man-in-formal-wear-sit-on-chair-armchair-behind-desktop.jpg 600w, https://tower.10bestbusinessloans.com/wp-content/uploads/2022/11/Man-in-formal-wear-sit-on-chair-armchair-behind-desktop-768x512.jpg 768w" sizes="(max-width: 600px) 100vw, 600px" /></p>
<h3>What are personal loans?</h3>
<p>Personal loans are a type of unsecured loan that can be used to fund almost any expense which includes launching a new business. When your personal loan gets approved, the funds are disbursed in a lump sum form. Then you need to pay the loan monthly plus interest. The loan amount for personal loans will vary. Some personal loan providers can lend up to $50,000 or even more. The repayment term can range from one to five years.</p>
<p>Personal loans are unsecured so you do not need to put up valuable assets such as your home and business as collateral. However, if you make late payments and continue to fall behind, your personal credit score will take a hit. This will make it more difficult to apply for another loan in the future. Since personal loans are offered based on your credit history, a higher score can get you approved with a higher amount and lower interest rate.</p>
<div class="buttono-wrapper" style="max-width:98%;" data-style-params="backgroundColor=%23f5f5f5&buttonHoverColor=%231c836f&borderColor=%23f5f5f5&textColor=%232d2d2d&buttonColor=%23ffffff&buttonBackgroundColor=%2325b296" offer-id="432" data-promoe-image-src="https://10bestbusinessloans.com/?p=25460" data-logo-src="https://tower.10bestbusinessloans.com/wp-content/uploads/2022/04/Fundera-logo.svg" data-promote-text="Minimum credit score: 620" data-button-text="Get Rate " data-partner-link="https://fundera.34rwxn.net/c/2213888/1088562/10988?subId1=" data-kidon-id="425" data-offer-link="https://fundera.34rwxn.net/c/2213888/1088562/10988?subId1=&offer_id=432&offer_name=Fundera" data-conversion-label="QuO1CLS_xIEYEKr4-oYp"><meta name="viewport" content="width=device-width, initial-scale=1" ><meta data-type="partner" ><div class="background-wrapper" style="background:#f5f5f5""><div class="border-wrapper" style="border-color:#f5f5f5"> <div id=662b6d7574ebd class="buttono-content" ><div class='buttono-logo__container'><a href='https://fundera.34rwxn.net/c/2213888/1088562/10988?subId1=' target='_blank'><img src='https://tower.10bestbusinessloans.com/wp-content/uploads/2022/04/Fundera-logo.svg' class='buttono-logo' style='width:50px; height:44px;'></a></div> <div class="main-content"><div class='col-md-6'><a href='https://fundera.34rwxn.net/c/2213888/1088562/10988?subId1=' target='_blank' class='buttono-promote-text__container'><p class='buttono-promote-text' style='color:#2d2d2d'>Minimum credit score: 620</p></a></div><div class='buttono-link-container'><a href='https://fundera.34rwxn.net/c/2213888/1088562/10988?subId1=' target='_blank' style='background-color: #25b296; color: #ffffff ' class='buttono-link'  > Get Rate </a></div></div></div><a href='https://fundera.34rwxn.net/c/2213888/1088562/10988?subId1=' target='_blank'><img class='buttono-image' src=https://10bestbusinessloans.com/?p=25460></div></a></div></div>
<h3>Personal Loans for a New Business</h3>
<p>Although lenders will allow you to use personal loans for anything, there are some loan providers that will put limitations on how you can spend the amount. if you plan to use a personal loan for your business, make sure that you understand what type of business expenses the loan can be used for.</p>
<p>Remember that a personal loan, despite being used for business purposes, is still tied to your personal credit. This means that you, not the business, are responsible for ensuring that you keep up with the monthly payments. If you fail to keep up with the payment schedule, your personal score will weaken. You will be held personally liable for paying back all outstanding debts from the personal loan.</p>
<p><strong>Pros:</strong></p>
<p>• Unsecured</p>
<p>• Get approved and receive funds on the same day</p>
<p>• Up to $50,000 loan amount</p>
<p>• Business credit history is not required</p>
<p><strong>Cons:</strong></p>
<p>• The borrower is held personally liable for payments</p>
<p>• Not all personal loan providers allow borrowers to use it for businesses</p>
<p>• Higher interest versus business loan</p>
<p>• Does not help with credit building for the business</p>
<h3>What are business loans?</h3>
<p>Business loans are a type of secured loan given to small businesses instead of individuals. Since these loans are secured, business owners typically use the business itself as collateral for their loans. Business loans can be similar to personal loans with fixed monthly payments. However, there are also business loans with variable payments which will rely on the revenue of your business.</p>
<p>Startups and businesses with variable cash flow will find the flexibility of these loans more advantageous than the usual term loan. Business loans can also cover a much bigger amount than personal loans. Lenders can offer up to hundreds of thousands depending on various factors. Business loan offers are based on both your personal and business credit history. You may also be asked to give a personal guarantee depending on your business’ value. A personal guarantee will also make you personally responsible for payments if the business falls behind schedule or closes.</p>
<p><img loading="lazy" class="aligncenter size-full wp-image-22513" src="https://tower.10bestbusinessloans.com/wp-content/uploads/2022/11/Cheerful-young-man-bonding-to-his-wife-while-shaking-hand-to-man-sitting-in-front-of-him-at-the-desk.jpg" alt="Cheerful-young-man-bonding-to-his-wife-while-shaking-hand-to-man-sitting-in-front-of-him-at-the-desk" width="600" height="400" srcset="https://tower.10bestbusinessloans.com/wp-content/uploads/2022/11/Cheerful-young-man-bonding-to-his-wife-while-shaking-hand-to-man-sitting-in-front-of-him-at-the-desk.jpg 600w, https://tower.10bestbusinessloans.com/wp-content/uploads/2022/11/Cheerful-young-man-bonding-to-his-wife-while-shaking-hand-to-man-sitting-in-front-of-him-at-the-desk-768x512.jpg 768w" sizes="(max-width: 600px) 100vw, 600px" /></p>
<h3>Business Loans for Your New Venture</h3>
<p>Applying for a business loan to cover business expenses ensures that your personal finances are separate from the business. This makes taxes less complicated for business owners. You would also get to qualify for deductions that are specific to businesses.</p>
<p>One major reason to get a business loan for a new venture is to minimize your personal liability when it comes to the loan. If your business fails, you may be able to just walk away from the business debt. But this would still depend on your business’s legal structure and whether the loan has a personal guarantee. If you fail to complete the payments on a business loan, this will affect your future business loan applications.</p>
<p><strong>Pros:</strong></p>
<p>• Loan bigger amounts</p>
<p>• Use funds for every business expense</p>
<p>• Lower interest compared to personal loans</p>
<p>• Business owner is not personally liable for payments</p>
<p>• Differentiate personal from business finances</p>
<p><strong>Cons:</strong></p>
<p>• Some lenders may ask for a personal guarantee</p>
<p>• Business assets as collateral</p>
<p>• Requires businesses to have a credit history</p>
<p>• Longer processing time for application and approval</p>
<h3>Loan Providers for New Businesses</h3>
<p><strong>Personal Loan</strong></p>
<p>Credible is an online marketplace that allows borrowers to find the best offers for personal loans. You can compare offers from 17 leading personal loan providers. Some of these lenders can offer you up to $100,000 loan amounts and 2.4% APR. Comparing offers through Credible is free and it’s easy to apply for a loan with the platform.</p>
<p><strong>Business Loan</strong></p>
<p>OnDeck is a business loan provider with both lines of credit and term loans for small businesses. For term loans, businesses can loan up to $250,000. For a line of credit, businesses can have up to $100,000. Businesses only need 1 year of activity to qualify for OnDeck’s loan offers. You can also get the funds on the same day of application.</p>
<div class="buttono-wrapper" style="max-width:98%;" data-style-params="backgroundColor=%23f5f5f5&buttonHoverColor=%231c836f&borderColor=%23f5f5f5&textColor=%232d2d2d&buttonColor=%23ffffff&buttonBackgroundColor=%2325b296" offer-id="639" data-promoe-image-src="https://10bestbusinessloans.com/?p=25460" data-logo-src="https://tower.10bestbusinessloans.com/wp-content/uploads/2023/03/torro-logo.svg" data-promote-text="No Collateral Required " data-button-text="Get Rates " data-partner-link="https://form.torro.com/apply/?sk=nv3Rfnv2lR6X8NvnrRCLmJBRZ&ck=lhoIECtiQQLjUmF8qoTkXCbsS&subid=" data-kidon-id="639" data-offer-link="https://form.torro.com/apply/?sk=nv3Rfnv2lR6X8NvnrRCLmJBRZ&ck=lhoIECtiQQLjUmF8qoTkXCbsS&subid=&offer_id=639&offer_name=Torro+-+BL" data-conversion-label="cftcCKDTmpUYEKr4-oYp"><meta name="viewport" content="width=device-width, initial-scale=1" ><meta data-type="partner" ><div class="background-wrapper" style="background:#f5f5f5""><div class="border-wrapper" style="border-color:#f5f5f5"> <div id=662b6d75763d8 class="buttono-content" ><div class='buttono-logo__container'><a href='https://form.torro.com/apply/?sk=nv3Rfnv2lR6X8NvnrRCLmJBRZ&ck=lhoIECtiQQLjUmF8qoTkXCbsS&subid=' target='_blank'><img src='https://tower.10bestbusinessloans.com/wp-content/uploads/2023/03/torro-logo.svg' class='buttono-logo' style='width:50px; height:44px;'></a></div> <div class="main-content"><div class='col-md-6'><a href='https://form.torro.com/apply/?sk=nv3Rfnv2lR6X8NvnrRCLmJBRZ&ck=lhoIECtiQQLjUmF8qoTkXCbsS&subid=' target='_blank' class='buttono-promote-text__container'><p class='buttono-promote-text' style='color:#2d2d2d'>No Collateral Required </p></a></div><div class='buttono-link-container'><a href='https://form.torro.com/apply/?sk=nv3Rfnv2lR6X8NvnrRCLmJBRZ&ck=lhoIECtiQQLjUmF8qoTkXCbsS&subid=' target='_blank' style='background-color: #25b296; color: #ffffff ' class='buttono-link'  > Get Rates </a></div></div></div><a href='https://form.torro.com/apply/?sk=nv3Rfnv2lR6X8NvnrRCLmJBRZ&ck=lhoIECtiQQLjUmF8qoTkXCbsS&subid=' target='_blank'><img class='buttono-image' src=https://10bestbusinessloans.com/?p=25460></div></a></div></div>
<h3>Final Thoughts</h3>
<p>One of the most crucial decisions business owners need to make is choosing the right type of loan to fund their venture. Personal loans have a straightforward application and are a good option for new businesses that do not have a credit history. Business loans, meanwhile, have higher loan amounts, limited personal liability, and lower interest rates.</p>
<p>&nbsp;</p>


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<p>10bestbusinessloans.com is a free online platform designed to help users with the process of choosing the services or products that meets their needs by providing helpful reviews, articles and comparison based content. We receive compensation from the various brands we review, compare and rank on the website. 10bestbusinessloans.com is not a lender, broker or financial institute, nor a party to any engagement related to financial products or transaction. All rates, fees and offers&#8217; terms presented herein are provided by the third party brands we engage with, which may include lenders, brokers and aggregators. We do not make any decision regarding such rates, fees, terms and eligibility or approval of a financial offer.  The actual offer you will receive is subject to its provider&#8217;s sole discretion including credit score, minimum deposit, minimum balance, requested loan amount, loan term, etc. and there is no guarantee you will qualify for the rates, fees, or terms presented herein. The content herein is not, and shall not be taken as an endorsement, recommendation or solicitation to borrow or obtain any financial service. We encourage you to carefully review the actual offer&#8217;s terms you receive from the provider, including all associated fees and costs. Filing for bankruptcy shall not exempt from repayment obligations.</p>
<p>Annual Percentage Rate (“APR”) is the yearly cost of borrowing from a financial institution, represented as a percentage. The APR includes fees related to originating the loan, not just the interest payments (such late fees, closing fees and administrative fees). Repayment examples (<u>for illustrative purposes only</u>): a $20,000 loan at 6.00% APR with a term of 5 years would result in 60 monthly payments of $387 (Total repayable: $23,199)<span dir="RTL"> </span>and a $100,000 loan at 3.00% APR with a term of 4 years would result in 48 monthly payments of $2,213 (Total repayable: $106,245).</p>
<p>¹ All businesses are unique and are subject to approval and review.</p>


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