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Small businesses are often in need of substantial capital for one project or another, but small business loans from traditional banks can be difficult to acquire for many firms. There are alternatives that can help companies get the working capital they need, among which are personal loans. Although they carry high fees, there are several situations when they just might save the day.

Brand-new Companies
It can be very challenging for start-ups to secure funding from banks or other lenders because they have no annual revenue or credit history as a business. Personal loans offer great flexibility in how they can be used. They can be a great way to get some startup cash, especially when the owner has decent credit.

Poor Credit
If a business has developed a less-than-perfect credit record, traditional loan options may have all but disappeared. In this case, a business owner who still has decent personal credit history can take out a personal loan at a better rate than the business would get.

Small Amounts
Most banks do not want to go through all the work of loan underwriting for business loans with small dollar amounts. A company that needs less than $25,000, for example, may have a hard time finding a lender. Personal loans fit perfectly within that lending category for small amounts.

No Collateral
Many new businesses do not have the collateral, like business equipment, real estate, or inventory required by big banks to receive funding. Most personal loans do not need collateral for approval.

Business owners need to do their due diligence with personal loans. They have need to understand all the fees and find out the APR. In many cases, personal loans can have average APRs of 30 percent. But if there is a specific need and a plan to quickly repay it, a personal loan can help move a small business into the next phase of success.


Search for Small Business Loan Sources and receive your matched lender list
AND received FOUR free Business eBooks worth $39.95!
Search for Small Business Loan Sources