Personal Loan for Financing Business Startup: Should You or Should You Not? - Loan Trivia


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Tuesday 8 January 2019

Personal Loan for Financing Business Startup: Should You or Should You Not?

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Since the entrepreneurial notion is on the rise, an ever-increasing number of people - working employees, graduating students, and even retired folks; are taking the plunge. Now, every entrepreneur thinks of transforming his business ideas into a successful company. However, in spite of planning all inventories, workforce and necessary stock, one aspect creates a hindrance for all – the need for finance.

That said, taking a business financing loan stands as the only option - which one to take is the dilemma. As per the eligibility conditions of business loans available in India, most startups don’t qualify for a loan. Even the government-backed startup funding scheme, as opposed to their claims, are quite difficult to obtain. Hence, the only option left is taking a personal loan for startup business financing. But, is that a good idea? Let’s find out the answer. 

1) The flexibility of usage: As we all are aware, personal loans come with end-usage flexibility, the borrowed capital can be used for multiple reasons. You can manage your working capital flow, pay and train your existing staff, manage the inventory and much more.

2) Would be available without the need for collateral: Unlike other business funding scheme, personal loans don’t require the borrower to pledge any security. However, the applicant would still need a very good CIBIL score in order to get approved for the loan.

3) The Flexi repayment plan makes repaying easier: Last but not least, the Flexi repayment plan makes it easier for you to manage the EMIs. To give you a gist, you can pay the interest component as EMI and settle the principal amount later.

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