Financing through personal assets

Another great way that you could use to finance your business is to take out a business loan that is secured against your home and personal assets. Most lenders including banks are aware that you are happier to lose business related assets than personal assets, and for this reason alone you will find that interest rates are quite a lot lower when you have your own personal assets secured against a business loan.

This also makes it that much more important to pay off the loan without mistakes or late repayments. When you run the risk of losing your home rather than your business property, you are more instinctively inclined to perform better and ensure that payments are made like a mortgage than an ordinary business loan.

Another benefit of a personal secured loan is that with some lenders, you can borrow a higher amount than you would be with just a business loan. That is a significant difference for any business owner, because while you may have your own goals and what you want to achieve in the business, it will be impossible without the loan itself.

Another important aspect of taking out a loan against your personal assets is that your credit rating is most likely higher than your business credit rating, so the terms of the loan itself will be much better. There will be a longer repayment date and lower interest, but you would also find that the lenders themselves will allow a grace period of when you need to start paying the loan back. With some lenders, they will offer you the ability to pay a month or two later with advanced warning.

If your personal credit is good enough, a personal loan will be a much better option as a business loan than a standard business loan itself. Just make sure it is a loan you would want in your name first!

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