People use personal loans for a variety of reasons, such as debt consolidation, paying off medical bills, or expensive car repairs.

But there’s something else the average consumer should know: a personal loan can be used for your small business.

Despite the label, a personal loan could be just the thing to keep your business going. The personal microcredit can be used for certain expenses such as:

• Inventory

• Equipment (things like printers, tools, copiers, manufacturing equipment, cubicles, etc.)

• Office space (either to buy or rent)

• Marketing and advertising (digital, promotions, print, etc.)

For any type of business expense, if your business doesn’t have the extra capital but needs cash to grow, then a personal microloan is a feasible option.

Small business loan vs. personal loan

Most small businesses that require the necessary funds to grow their business typically look for a small business loan. This makes sense since a small business loan is generally beneficial to the small business owner.

In certain situations, the small business loan helps the business owner purchase expensive items, such as equipment, inventory, or raw materials. However, the fact that the small business loan is the industry standard does not always make it the right solution.

The biggest problem with a small business loan is the stringent requirements. This is not only true with eligibility requirements, but also comes into play during the application process. Here are some of the biggest challenges:

• Lengthy application process that can consume hours of your valuable time

• Documentation requirements, such as providing a business plan, tax returns, references, and financial data.

• It can take a long time to receive the funds (even after getting an approval), as the entire process can take up to 90 days.

• There are up to seven different types of small business loans…choosing the right one for you may take some time

Although it’s common to initially assume that a small business loan is the best option, you may find these requirements difficult to meet or that it will take longer than you want to get your business up and running.

Is a personal loan application process better?

The short answer is that the company offering the personal loan can make an application and a decision regarding that application within one day.

With a personal loan, you don’t have to go through as many obstacles. Instead, it’s much easier to acquire a loan in a timely manner (and without the hassles mentioned above).

Some of the main benefits of a personal loan for business use, especially compared to a small business loan, include:

• Streamlined application process that can be started online or by phone in a matter of minutes

• Less documentation requirements

• Same day decision (not always, but most of the time)

• Less complications, with the main decisions being the payment schedule and the amount to borrow

Simplicity and convenience alone are reason enough to learn more about using a personal loan for your business.

make a final decision

Now that you understand that a personal loan can be used for your business, you need to decide if this is the right financial solution for your business right now.

As you compare this option with a small business loan, ask and answer the following questions:

• How do you plan to use the funds?

• Do you need the money in the immediate future or can it wait?

• How much money do you need to borrow right now?

• Have you collected all the information you need for the application?

• What type of loan is more affordable in the long term?

By answering these questions while consulting with a lender for each type of loan, you will be in a position to make an informed and confident decision.

Despite the name, you can use the funds from a personal loan for a variety of business expenses. There are several lenders out there, but the benefits and convenience of a personal loan make it a good consideration for any business.