Many small businesses will experience hardship at some point during their existence. Indeed, 73% of small businesses use loans –– and that figure should galvanize any new business owner and help alleviate any fears they may harbor about business financing.
Just because a business owner is a little short on cash from time to time, it doesn’t mean they need to panic. Unfortunately, some business owners do panic and decide using personal savings to fund their company is the best way forward as opposed to a small business loan.
And using personal savings in your business just isn’t a good idea. In this post we’ll discuss the advantages –– and many drawbacks of dipping into your personal savings to cover business expenses:
When business owners find themselves in a pinch, they can sometimes make unwise decisions.
There are several reasons why a business owner might elect to use their personal savings instead of applying for a business loan, including:
Given this line of reasoning, it’s understandable why certain small business owners would find using personal savings preferable to applying for a loan. The truth is, though, none of those concerns are legitimate, thanks to the emerging field of alternative business lending.
Rather than using personal savings in business, entrepreneurs should exercise all options before that. The good news is, there are plenty of business loans available to companies across all industries.
Not only are these loans company-specific, but alternative lenders have made it even easier and more advantageous for small business owners to pursue loans than ever before.
That’s because lenders will work with companies to find a payment plan that works for them, rather than using a cookie-cutter rate like the bank. Furthermore, lenders don’t require stringent credit checks and collateral like banks do.
And lastly, there are a plethora of loan options that can help a business acquire funding quickly. You don’t have to wait weeks or months to get crucial financing. You can apply today and secure the cash you need within 24 hours.
Using personal savings in your business will almost always cause more harm than good.
Not only will you stretch yourself too thin, but you could end up facing bankruptcy or even worse consequences as a result. For the sake of your personal and business credit, don’t ever squander your savings when there are loan options available.
To get started finding the perfect financing alternative for your business, contact the National Business Capital team today by calling (877) 482-3008, or fill out our 1-minute application by clicking the link below.
National Business Capital is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.
Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services.
We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!
Megan is passionate about helping business owners along their journey - providing them with relevant content they can use in their day-to-day operations.