Any business owner can tell you that even with a great business idea supported by a solid business plan, it can be complicated to obtain traditional bank loans. Financial institutions are reluctant to advance finances to small businesses unless enough collateral is available. Statistics show that the micro-business loan approval rate is below 25 percent. Luckily, many of these businesses can obtain small business loans from private business lenders. Many business owners do not like relinquishing their equity or dealing with lenders who want to patronage their business. However, securing a personal loan is a viable option for those unable to get financing from traditional lenders such as banks.
Private business loans lenders can be;
- Angel investors
- Family members
- Venture capitalists
- Friends or
- Online lenders
Some business people prefer borrowing from private lenders for convenience and speed. Private financiers are more flexible and reliable to businesses’ needs than other traditional lenders.
When to opt for a Private Business Loan
If you have a small business, a private loan may be a viable option. Private lenders offer various products which could be helpful to your business requirements. A private business loan can assist you in meeting a good number of business needs, including:
- Upgrading equipment purchasing inventory
- Debt consolidation Management
- Business cash flow Management
- Retail location Remodeling
- Rent payment
- Retail location expansion
Whether you need a large loan, a short-term loan, or a small merchant advance loan, private business loans are available for you. Here are a few examples of personal business loans for your business needs.
For merchant advances, repayment is a percentage of the daily sales. This option is independent of your credit history; however, you must meet basic requirements for monthly credit card sales and business time.
A working capital loan is advanced on account of the amount your business generates.
Private business lenders also advance term loans that compete with loans from traditional banks.
Private lenders, in some cases, will agree to give you a lump sum of cash to own a stake in your business. This type of personal business loan can be risky, but it can be helpful, especially for starters who require funds to actualize their business.