Starting a business can be exciting and hectic at the same time. The greatest problem is to accumulate enough funds to get the business off the grounds. While some people prefer taking a personal loan to finance their business, others opt for a business loan. However, a business loan is a better option if you are seeking money for your company.
Here is a look at why business loans are preferred over personal loans-
1. Large sums of money
If you opt for a business loan, you can apply for a greater sum from the lender. You can use this money for your business or company. At the start of the business, you need the additional money to establish good relations with your client along with the arrangement of proper space for your company. Different banks have varying maximum business loan limits, check online for more details.
2. Easy approval
While you will need to provide an outline for your business, along with extensive plans for the same, the approval process is easy to crack. If you have confidence over your own business model, you just need to convince the bank to support your vision. Most financial institutions will be eager to help you if they feel that your plan is profitable. Once approved, you will get the money within a few hours or days. You do not need to meet any special business loan eligibility for clearing the process.
3. No collateral required
For a personal loan, you would need collateral, but for business loans, no such collateral is required. This is an attractive benefit of business loans, which make the application procedure simpler and faster.
4. Affordable interest rates
Business loans are a better choice if you are trying to minimize the interest on your borrowed sum. Most business loans have a nominal rate of interest, which in turn will help you grow your business in the future.
5. Tax benefits
As per the Income Tax Act of 1961, certain business borrowers are liable for tax exemptions on the repayment of the loan amount. This is yet another way, in which business loans help new businesses to grow. The money saved on taxes can be used to improve the company.
Therefore, if you require funds for your company, it is always fruitful to take a business loan instead of a personal loan.
Here is a look at why business loans are preferred over personal loans-
1. Large sums of money
If you opt for a business loan, you can apply for a greater sum from the lender. You can use this money for your business or company. At the start of the business, you need the additional money to establish good relations with your client along with the arrangement of proper space for your company. Different banks have varying maximum business loan limits, check online for more details.
2. Easy approval
While you will need to provide an outline for your business, along with extensive plans for the same, the approval process is easy to crack. If you have confidence over your own business model, you just need to convince the bank to support your vision. Most financial institutions will be eager to help you if they feel that your plan is profitable. Once approved, you will get the money within a few hours or days. You do not need to meet any special business loan eligibility for clearing the process.
3. No collateral required
For a personal loan, you would need collateral, but for business loans, no such collateral is required. This is an attractive benefit of business loans, which make the application procedure simpler and faster.
4. Affordable interest rates
Business loans are a better choice if you are trying to minimize the interest on your borrowed sum. Most business loans have a nominal rate of interest, which in turn will help you grow your business in the future.
5. Tax benefits
As per the Income Tax Act of 1961, certain business borrowers are liable for tax exemptions on the repayment of the loan amount. This is yet another way, in which business loans help new businesses to grow. The money saved on taxes can be used to improve the company.
Therefore, if you require funds for your company, it is always fruitful to take a business loan instead of a personal loan.
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