When it comes to launching a new business, you need sufficient financial resources to support business operations. Due to the lack of financial stability, 8 out of 10 businesses fail within their first year, and you don’t want your startup to be one of them.
Aside from attracting investors, you should also focus on building your own equity in the business. In order to arrange sufficient funds, you can acquire loans. However, you may get confused as to whether you should go for business loans or personal loans or a quick loan to build your new business.
Here’s a brief guide on different types of loans you can acquire for your business, from business loans to a quick loan and which loan may work best for you.
Business loans provide entrepreneurs with financial assistance and help them cover business expenses. You may spend the sum to acquire office supplies, machinery, and other assets through which you can generate revenue in the long run.
Let’s have a look at the most common types of business loans:
- Term loan
- Equipment financing
- Lines of credit
- Business credit cards
- Invoice financing
- Merchant cash advance
Quick loans are usually acquired to meet personal needs. For instance, you might get this loan to repair your damaged vehicle, cover medical expenses, and buy equipment for your home. However, not many people are aware that they can also spend the amount to establish their startups.
For this purpose, you can go for the following types of quick loans:
- Payday loan
- Personal loan
- Secured loan
- Guarantor loan
Why a quick loan is your go-to option
When you run a large business with a big team, you need a large sum to increase your income. However, when it comes to small start-ups, your financial needs are limited. This is the reason why you can consider applying for a quick loan instead of business loans.
You can get quick loans online, however, the maximum limit of the loan varies with different lenders and the different type of quick loans you can get. Quick payday loans vary from £100 to £5,000, While personal loans are around £500 to £25,000. The loan duration may vary from 3 months to 25 years.
The process of applying for a business loan is quite hectic and there’s no guarantee that you’ll qualify for that. Quick loans, on the other hand, involve convenient terms and conditions. Therefore, you’re likely to qualify for a loan provided that you don’t lie about your income.
Unlike business loans, you do not need to wait to receive the amount via a personal loan. It may take a few business days to get the money you need to establish your business. So, if you need funds on an urgent basis, you may find it suitable to apply for a quick loan.
If you own a small business and need quick cash, you can make do with a quick loan instead of going through the hassle of acquiring a business loan. Not only is it convenient, but it also helps you quickly arrange funds to better manage business operations.
There are always risks when taking out any loan, just make sure you do plenty of research to which loan is best for you and your start up business, and the number 1 rule when taking out any loan is – make sure you can make the repayments each month. Failing to do so will land you in financial trouble. Something you don’t want when starting up your own business as this could land you with a County Court Judgment (CCJ) and stop you acquiring any more finance in the future.