Starting a small business or any business can be incredibly challenging. Many people do not have the money they need to start their business right away. This leaves people wondering whether they should fund their start-up with a small business loan or a personal loan. Choosing the right loan is important for your financial future. However, if you are facing bankruptcy, you may want to talk to a Tullahoma bankruptcy lawyer about your options.
SHOULD I USE A PERSONAL LOAN OR A BUSINESS LOAN?
There are pros and cons of choosing a business loan or a personal loan to start your business. Starting a business is hard enough but choosing the right loan can be just as hard. You have to consider so many factors that the whole process can become extremely frustrating.
The good news is you have several ways to fund a business to choose from. Your personal credit history may affect which options work best for you. There are microloans at around $50,000 or less with a quicker turn-around. You have small business loans and personal business loans. Alternate ways to fund your business can also be explored:
- Crowdfunding
- Vendor credit
- Business credit cards
Small business loans are designed for starting businesses and come with the benefits of a larger sum of money. The downside is that the processing time of these loans can take much longer than personal business loans. With a personal loan through your bank, you have the benefits of:
- Faster processing and acquisition of the money you need
- Fixed interest rates and monthly payments
- Lower interest rates
- Potential interest rate discounts
- You can use this loan for anything
However, with benefits come costs. Some of the main costs of using a personal loan to fund your start-up include:
- Less money than a business loan may offer
- Decreased chances of building business credit
INITIAL TIPS FOR FUNDING YOUR BUSINESS
Figuring out how much money you will need to start your business is crucial before deciding how to fund your business. There are several business start-up tips that can make this process easier. First, you want to have a really powerful reason for starting your business because this will serve as motivation to keep going.
When you have your reason and vision for your company, you can start making a plan. Your business plan will help you calculate how much money you will need to start your business. Be sure to figure out how much money you could make from your business to justify the cost you will use to start your business.
Think about all the costs of running a business when deciding like:
- Renting an office space versus working from home
- Buying new office supplies versus used office supplies
- Materials needed for your product
BANKRUPTCY LAWYER IN TULLAHOMA, TN
Going through bankruptcy can feel overwhelming. Do not hesitate to contact us at Tom Bible Law today at (423) 690-7712 to see what steps you can take. Our experienced team of Tennessee bankruptcy attorneys might be able to help you find the best bankruptcy option for your unique situation. You can find us in the Tennessee cities of Chattanooga and Tullahoma.