When you want to start a business, you might find yourself wondering whether a business loan or personal loan would be better for you. Both of these types of loans come with different costs and benefits. They also differ slightly in requirements, with small business loans coming with more specific requirements than personal loans. Going through this process is not always easy. If you ever have any questions, consider talking with a Tennessee bankruptcy attorney for help.
Requirements for a Tennessee Personal Loan
A Tennessee personal loan can be harder to attain in recent times because of the rigorous process you have to go through. Not only do banks usually require you to have a good credit score built up, but some banks avoid giving personal loans to anyone with a bad credit history. This can be a difficult challenge to face when you had a credit slip up in your past or if you just recovered after bankruptcy.
Most personal loans are unsecured loans, meaning that this loan can be used for anything you want, as long as you make a commitment to pay the loan back. This also means you do not have to worry about any of your belongings or financial assets being seized if you fail to pay back the loan by certain deadlines. However, this is the reason personal loan lenders are so wary about giving personal loans to people with poor credit histories.
When it comes to making your decision, looking at personal loan benefits can help:
- Banks are not your only source of personal loans. You can attain a personal loan from a family member or credit union
- Interest rates are lower
- Your monthly payments and interest are fixed
- Approval is usually faster compared to other loans
Challenges of Obtaining a Tennessee Business Loan
Tennessee business loans also come with their own unique benefits compared to other types of loans. What makes this type of loan harder to apply for than a personal loan is the added requirements. A small business loan requires you to have a business that meets certain size standards, not have internal financial resources, and be expected to make profits in the future.
You will also need to offer a good argument for why you will be able to repay back the small business loan once your business is started. This can be one of the most daunting parts to prove because you have to convince the loan lender that your business plan will be successful. The benefits of a Tennessee small business loan is you can borrow up to $2 million and use this loan for 25 years for real estate and seven years for a working capital business.
Bankruptcy Lawyer in Chattanooga, TN
Deciding between a small business loan or personal loan in Tennessee can be difficult when you start weighing the pros and cons. Feel free to seek guidance from our legal team in Chattanooga, Tennessee, and North Georgia if you have any questions or concerns related to financial challenges and bankruptcy. Contact Tom Bible Law at (423) 424-3116 to talk to a Bankruptcy lawyer in Tennessee for a free consultation today. Our Tennessee bankruptcy attorneys are located in Chattanooga, Kingsport, and Tullahoma.