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Becoming your own boss is something many of us dream of. But getting access to funding to help you kickstart your dream can involve a lot of red tape, especially when you are borrowing from big financial institutions like banks. A personal loan can give your business the push it needs. Here are five ways a personal loan can give your business the boost it needs..
Getting ready for lift-off
You have looked at every possible angle of your business plan as to where it will thrive and make you money. However, finding a financial injection that will help boost your business into lift-off can be hard if your funding comes at an exorbitant rate or because you don’t meet the strict criteria. This can cause many entrepreneurs to shelve their ideas. Personal loans tend to come with a rate as low as 7.74% when you compare.
Taking care of those unexpected expenses
A business is can be unpredictable. This means you also need to be financially prepared to cover unexpected expenses. However, if you are just starting out you could find yourself a bit cash-strapped to take care of every expense. According to the Australian Securities and Investments Commission, 40% of small businesses closed due to having inadequate cash flow. A personal loan can keep you covered and is a convenient way to help you deal with such expenses.
It requires no security
Some people who have start-ups tend to have little or no assets that they can use as security. Using your home or car as security can be risky because if the business fails that means that your home will be repossessed. Personal loans, on the other hand, tend to be unsecured which means that you do not need to use any asset as security.
You can find one that suits you to the ‘T’
Your business is not run the same way as the next and your financial situation is different. Having funding that gets this is vital. It can help you avoid falling into the debt trap that comes with taking out a loan. It is not always about a low rate when it comes to funding your venture, but it also boils down to getting financing that allows you to borrow an adequate amount to cover your basis, no matter how big or small they are, at an affordable rate.
Have the flexibility to handle costs
Being able to effectively manage your costs is one of those things that can either make or break a business. Not everyone has access to a start-up capital to get their business on its feet, which is why most people will opt to finance a business, such as with a $100,000 business loan. However, it is important that you find a loan that offers you room to breathe when it comes to repayments. Unsecured business loans are tailor to work with your cash flow so that you can effectively manage the cost of the loan throughout the loan term.
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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
Approval for personal loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.
The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.
