When you are starting your own business, you have the option to choose a business loan or a personal loan to fund your business. While there are several factors in favour of a business loan, there are some situations in which a personal loan is the obvious choice. The decision to avail a personal loan for a self-employed business should be made after considering the situation and the various financial parameters involved.
During the bootstrapping stage
Lenders are understandably apprehensive about offering business loans to individuals simply based on the business idea. Business loan eligibility criteria are very stringent, and you need to have good credit history to back you up. Businesses which do not have a credit history to show and little proof of their financial standing may be denied a business loan. Hence, a personal loan for self employed businesses may be a better proposition.
However, you can easily get a Bajaj Finserv business loan by meeting the simple eligibility criteria and by submitting only 2 documents.
No collateral or guarantor to offer
If you are starting a new business from home, it is unlikely that you will have any collateral to offer to the lender in order to secure a business loan. It may be difficult for you to secure a financial guarantor who can vouch for your financial credibility. However, with Bajaj Finserv you can avail business loans without providing collateral or guarantors.
Personal loans are much easier to come by and will be the best alternative for you if you do not have sufficient collateral and no guarantor to back you up.
For smaller loans
The documentation process involved in order to secure a business loan is under more scrutiny as opposed to relatively relaxed lending norms for personal loans. If your loan requirement is for a small amount, it may not be worth it to go through the entire rigmarole of securing the business loan. A personal loan is a simpler and easier method to finance your requirements.
You also need to compare the business loan interest rates with the interest rate on personal loans before you make a decision. The Bajaj Finserv personal loan for self-employed or business loans come at an attractive interest rate, so that these loans remain affordable.
If your business plan is nascent
Business loans are offered on the basis of an elaborate business plan and the lender needs to know how the loan amount will be utilised. If your business plan is still evolving and you do not have a well-defined utilisation plan, the possibility of securing a business loan is minimal. However, with Bajaj Finserv, availing business finance has never been simpler and they are a convenient financing option.
On the other hand, personal loans can be easily procured. The lender does not question you on the business proposal and the utilisation plan. If your business plan is in the nascent stage, a personal loan makes a better choice.
Pre-approved offers on a gamut of loans including personal and business loans, and other financial offerings make it easy to avail finance.
