If you are planning to start you own business or if you have an established business, in both the cases you may need money to proceed further and to gain success. Setting up a business is more like building an empire. It needs time, dedication and effort for the complete set up and also to maintain it for long. Be it in the first stage of business, growing stage or failure stage, funding is mandatory. Without investing funds, you cannot even think of making your business stand out. Funding does not mean you have borrow the fund from somewhere. If you have enough savings with you, you can easily utilize that money for your business growth. But, it is recommended not to invest all your savings at the initial stage of business and left with nothing. This will lead to further problems in future. The alternative way will be to borrow some money from a bank or an NBFC and start your business. Then, you can use your savings and business profit to repay the bank loan. You will get two options while choosing the lender- banks and Non-Banking Financial Companies (NBFCs). You will also get two options while choosing the loan option- personal loan and business loan. We all know when it comes to financing a business, it is obvious that we will choose business loan. But, many lenders are reluctant to offer business loan to a start-up. So, what to do? There comes the confusion whether to opt for a personal loan or business loan. New businesses face such confusion of types of loans. For a start-up, it is better to apply for a personal loan. This is because, a personal loan is readily available, eligibility criteria are lesser, do not need to provide any collateral or guarantor to the lender, can get instantly and it is much easy to get and use. Lenders never ask you the cause of applying for a personal loan, so be careful. Do not apply for it unless and until you really need it.
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AuthorAman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management. |