Getting a business loan can be challenging, especially if you are in the early stages of your business. You only stand a chance of securing a traditional business loan from a traditional bank if you have a comprehensive business plan, a thriving facility and a reliable cash flow. In contrast, a personal loan is given to the individual. Here, the lender evaluates your personal income and creditworthiness rather than that of your business. A personal loan also allows you more flexibility in repayment and does not need a collateral or guarantor.
So, if you find yourself in any of the following scenarios, a personal loan for self-employed people might be the perfect fit.
8 Reasons Why Businessmen Need A Personal Loan
To Invest in Building Infrastructure
A personal loan for businessman can be used to build your infrastructure which will help you build a peaceful environment to work in, thus enabling you to grow your business in size and revenue.
To Manage Operational Costs
The personal loan can help you take care of your ancillary expenses, such as salaries, raw material, utility bills and supplies without slowing down your operational activities when in a cash crunch.
To Upgrade the Plant and Machinery
To cater to the demand of your product or service, you may need to introduce new technology or increase production capacity by adding new equipment/machinery. A personal loan may help you meet the demand for additional capital without it being an extra financial burden.
To Manage the Inventory
Inventory is a big expense, but you have to keep on replenishing your inventory to keep up with the demand. A personal loan for self-employed individuals can help you with purchasing inventory to grow your business.
To Increase Cash Flow and Working Capital
If you are a small business owner, it is usually a challenge to manage cash flow and meet the liquidity requirements for a working capital, such as rent, overhead salary, utility bills and inventory management; a personal loan for business owners may be the solution.
To Hire New Employees
Your small team is overburdened, there is a risk of your business model failing over a period of time. As a business owner, taking a personal loan can be the best option to meet the expenses of hiring new employees so that you can even out the burden and focus on growing your business.
To Purchase Raw Material
If you seal a good deal, you may need to increase the production capacity of your business, and that may require you to purchase raw material to cater to the high demand. A personal loan may be the solution here.
To Expand Your Business to Another City
If you plan to expand your business to another city, you will need more capital. You may need money for up-scaling your production, launching a new product, opening a new division or penetrating a new market/area. A personal loan can give you wings to fly.
MoneyTap's personal loan for self-employed has interest rates starting at 1.08% per month (13% pa). However, interest is charged only on the amount you borrow or use. The processing fee is 2% + GST.
Documents required for MoneyTap's personal business loan are as follows:
- Aadhar Card
- Identity proof
(Driving license/Voter ID/Passport/Aadhar/PAN)
- Address proof
(Driving license/Voter ID/Passport/Aadhar/Utility bills/Scheduled bank statements)
- Original photograph required
With MoneyTap, your personal loan for business gets approved within minutes and you can have money at your disposal whenever you need it. Once your credit limit is approved, you can access the funds 24 hours a day, 7 days a week at the tap of a button.
MoneyTap's personal loan for self-employed has a minimum loan limit is ₹ 35,000 and the maximum is up to ₹ 5 Lakh.
If you are not able to get a small business loan from the traditional banks, applying for a personal loan for business is your best option. You can apply for MoneyTap’s personal line of credit and get a personal loan for businessman from that with instant approval without any collateral or guarantor.
Yes, it is easier to qualify for a personal loan for self-employed. The banks and lenders of personal business loan rely on your finances and creditworthiness and not that of your business. If you are in the nascent phase of your business and lack enough credentials to get traditional business funding, then a personal loan for business is your best bet.
There are various resources for small business loans. Some of them are:
- Term loans
- Personal loans
- Mortgage loans
- Personal line of credit
Deciding on the best resource for small business loans depends on your personal business requirements. If you are in the early stages of your business, a personal loan for self-employed individuals would be the best resource for you and for that having a ready line of credit available to borrow from is a great option.
Yes, you can definitely apply for a loan to finance your startup. The benefits of taking a personal loan to fund your startup from MoneyTap are as follows:
- No security required – no collateral and guarantor required.
- Faster approval process – can get your loan approved in minutes.
- Flexibility of loan usage – can use for any purpose you deem necessary.
- Borrowing options according to your needs – you can borrow ₹ 35,000 to ₹ 5 Lakh. You can withdraw, as low as ₹ 3,000 and as high as your approved limit. Best of all, the interest will be charged only on the amount you borrow from your approved credit line.
You should choose online loans from online lenders like MoneyTap for your small business if you are facing any of the following situations:
- If your business is not yet started
- If you are worried about the collateral
- If you don’t want to wait long for the amount
- If you need a small amount of money
If your business is a startup and you need a lesser amount, then a personal loan is a good idea.
- Low-interest rate of 1.08% per month (13%pa) as compared to other business loans.
- Quick availability of the personal loans for the business.
- Personal loan for self-employed is an unsecured loan and hence it is collateral free.
- Less documentation at the time of borrowing the loan.
- Less processing time which allows the funding to be flexible for the business.
- You pay interest only on the amount you take a loan for and not the entire approved limit.