PrimeRates provides access to personalized business loan offers through our simple and quick pre-qualification application. Once you’re pre-qualified, you can select the best offer for you and finalize the business loan application with the lender.
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Our simple application takes less than 5-7 minutes to complete.
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Choose the offer that best fits your needs by comparing loan amounts and terms.
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Finalize your loan offer with the lender you selected to receive your funds.
If you’ve got a billion-dollar business idea – but a hundred-dollar bank account – you might think there’s no realistic way your amazing concept could ever get off the ground. After all, you’ve got to spend money to make money, right? And if you’ve got nothing to spend, well, your brilliant idea is likely to remain just that – an idea. Fortunately, there’s more to the story. Individuals with limited funds can transform their ideas into enterprises by using a personal loan for business purposes. But how does a personal loan for business purposes work, and what does it take to qualify for one? Find out the answers to these questions and more in this overview of personal loans for business purposes.
Say you want to start a business as a freelance photographer. A personal loan can be used for anything from a camera to a website to online ads to promote your new venture. Or maybe you want to sell jewelry or custom clothing at a local farmers’ market. In this case, you could use a personal loan to pay for your booth and purchase raw materials used to create your products. Those are just a few examples; personal loans can be used for almost any financial transaction.
» See Also: Compare start-up business loans
There are several ways to go about borrowing money to start a business, but each different avenue offers its own set of strengths and weaknesses. Credits cards and business loans are popular options, but for first-time entrepreneurs, a personal loan is likely to be the best fit.
There are many advantages to using personal loans for startup business purposes. Here are a few ways they compare.
Although no two lenders are exactly alike, virtually all personal loans for businesses begin with an application. This is generally a painless process that involves filling out a form and providing personal information including your social security number. Using these details, a lender will run a credit check to evaluate your history as a borrower before ultimately approving or denying your application. If your loan is approved you can generally expect to see your funds within a few days.
While nearly all lenders impose some restrictions regarding what type of purchases a borrower can and can’t use a loan for, for the most part, lenders don’t care whether you use your funds to splurge on a cruise or start a new company. All that matters to them is that you make your payments on time. So for budding entrepreneurs, this means you can use your personal loan to cover just about any business cost.
It’s not all upsides with personal loans, however. There are certain instances where this type of arrangement can hurt you financially, or where other options simply make more sense. Here’s a quick look at a few of the drawbacks to using personal loans for business.
Community banks and credit unions are more likely to issue personal loans than nationwide financial institutions, but, these days, online lenders are perhaps a more popular option. This is largely due to the convenience factor. Applying for an online loan doesn’t require you to go anywhere, and searching online makes it easy to compare interest rates and other loan terms.
If you’ve got decent credit and you’re looking to launch a business with the help of a personal loan, here are three lenders that might be right for you.
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| APR range | 6.95-35.99%* |
| Available loan terms | 36 to 60 months* |
| Loan amounts | up to $35,000 |
| Time to fund | One to three business days after approval |
| Fees | Origination fee: Ranges from 2.4% to 5% of the initial loan amount Late fee: $15 or 5%, whichever is greater Prepayment fee: N/A |
| Credit needed | 640+ |
| Income needed | N/A |
| Soft Credit Check? | Yes |
| Best for | Borrowers with high Income & credit utilization of less than 50% (not including mortgages), Good Credit |
| Click “Check Rates” to apply to Prosper Check Rates | |
» MORE: Prosper Loan Review
» MORE: LendingClub Personal Loan ReviewIf you’d like to take out a personal loan to launch a small business, but you haven’t been the most responsible borrower, you still have options. Some lenders will still work with bad credit applicants, though the terms might not be as favorable as they would otherwise.
If your credit score isn’t exactly in good shape, you might still qualify for a personal loan from these two online lenders.
| Lender | APR Range | Loan Term | Loan Amount |
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9.95-35.99% | 36 to 60 months | up to $35,000 |
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16.05-35.99% | 24 to 60 months | up to $30,000 |
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15.49-34.99% | 24 to 48 months | up to $25,000 |
| Click to compare estimated rates on PrimeRates. Compare Rates | |||
*Terms are for unsecured loans and may vary for secured loans.
Don’t let your brilliant business idea fade away. Bring it into reality by applying for a personal loan today.
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