Growing a business is a rewarding and lucrative opportunity. However, making money takes money, and sometimes getting the ball rolling is the most difficult part. If you’re a small business owner in need of funds for your next project, hire, equipment, or business purposes, personal term loans are one of the best options.
Personal term loans put a premium on flexibility, and you can get your funds in days with the right lender. This article will cover personal loans, the different types, and how you can use them to boost your business to success.
What is a Personal Term Loan?
You deserve the funds to grow your business if you’re a small business owner with a good track record and credit history. Personal term loans can be used to fund your business purposes, including purchasing equipment/inventory, kick-starting a campaign, hiring new employees, or even scaling up. Unlike standard business loans, these loans don’t consider your time in business, just your credit score and verifiable personal income. This distinction makes personal term loans an excellent option for startups or small business owners getting a head start on their runway.
However, because these loans pose a significant risk to lenders, ensure that you have at least 50k in verifiable income, a 650+ credit score, and currently renting or owning real estate. Further, personal term loans usually have an APR of 10-15%. Most personal term loans are unsecured, requiring no collateral. However, taking a secure loan can be advantageous depending on your options.
Secured vs. Unsecured: What’s the Difference?
While personal-term loans are great for borrowers, they pose a significant risk to the lender. Because of this risk, lenders need assurance that you can pay the loan back in full. When applying for personal term loans, you are leveraging your ability to pay against the severity of the lender’s terms. Generally, you leverage your credit score, verifiable income, and/or collateral, and the lower the risk to the lender, the better your terms will be.
Secured Personal Term Loans
While most personal term loans are unsecured, secured loans can be highly advantageous if you qualify. Secured loans require collateral, and the greater the value of the collateral, the greater the amount you can borrow against it. Having collateral gives the bank a default if you can’t repay the loan and poses less risk to the lender. Because of this lower risk, lenders offer much lower interest rates, higher loan amounts, and longer terms.
Unsecured Personal Term Loans
Typically, personal term loans are unsecured without collateral. Lenders leverage this risk by requiring higher interest rates, lower loans, and shorter terms from the borrower. These loans rarely exceed $50,000 and depend on the borrower’s credit score and verifiable personal income.
Personal term loans can be highly advantageous if you are an established small business owner who needs extra funds to expand. Because the funds can be used for any business purpose, you can get a head start on business expenses, late invoices, or new hires. However, traditional banks are often risk-averse and not interested in lending to new or growing small businesses. That’s no problem because you are covered by online lenders such as BitX Funding.
What Business Purposes Can I Use Personal Term Loans for?
The best part about personal term loans for your business is their flexibility. Whether you’re starting a new business, an established business looking to grow, or need emergency funds, personal term loans are covered for your business purposes. Unlike other loan types, the funds aren’t limited to specific business expenses like equipment financing or late invoices. You use the money any way you need.
That being said, here are some common ways to use your term loan as a small business owner:
- Funding the costs of a new business
- Covering the day-to-day costs of running your business
- Purchasing new equipment/hiring new employees
- Run advertising/PR campaigns
- Have a safety net for emergencies
It can be difficult to get the right funding if you’re a new small business owner. While lenders consider business loans risky, they will allow personal term loans. The most significant advantage of personal loans is that there’s no restriction on using them for your business. You can use the funds for any business purpose as long as you meet the requirements for the loan. In fact, the better your credit score and personal income, the better terms you can apply for with your lender.
Personal term loans are great for new business owners or those looking to expand. However, you will need a 700+ credit score and at least $50,000 annually in verifiable personal income. Because these loans are typically unsecured, they have high APRs, short terms, and low loan amounts. However, depending on your credit and business track record, you could qualify for competitive rates with BitX Funding.
Get Your Personal Term Loans Today with BitX Funding
Whether starting a business, transitioning careers, or just getting through a rough patch, it can be difficult to get funding. Traditional banks are reluctant to assist small business owners and give them the financial boost to succeed. They see small businesses as risky and not a good business investment. We at BitX Funding see the people behind the small business and offer competitive loan services to those in need.
Get the funds you need today with personal term loans from BitX Funding. Personal loans put a premium on flexibility because you can apply the funds to any business expense. If you meet the qualifications, they are easy to apply for and offer competitive rates compared to other loans. If you’re interested, contact BitX Funding today to get started.
For more information on working capital loans, contact BitX Funding by phone or email or fill out the form below.