Here at Coast Funding, we talk a lot about small business funding solutions, but if you are a newer business owner, you may ask yourself: what is a small business loan? I’ll give you a hint: It is certainly not a personal loan!
Small businesses need money from time to time. When the need arises, a small business owner will begin to reach out to companies to see if they can get money for their business. Products and solutions vary vastly from company to company, with some companies offering grants, government-backed solutions, unsecured funding, secured funding, the list goes on…
I’ve said it already, but I’ll say it again.
I mean this on a few fronts. First, the qualifications needed are different between a business loan and personal loan. Second, you cannot use a business loan for personal expenses. Like, at all. We wrote a little bit about why this is a bad thing in another blog post.
See Blog Post: What Can I Use My Funds For?
Funding companies do not take debt-to-income (DTI) into consideration as much (or at all) for a small business loan. Whereas that is a key factor in determining the approval odds on a personal loan. Also, a small business loan is often not associated with the owner’s personal finances, so therefore it does not count toward their personal credit.
However, be aware that most (if not all) funding companies will ask for your personal social security number (SSN). Why? Well, funding companies need to determine their level of risk when funding a deal, and the owner’s SSN gives a good insight into that risk level.
We have another blog post that covers what you can use your money for, so we will keep it relatively light for this one. Basically, a small business owner receives funding from a funding company in the form of a loan or other type of funding program. Depending on that specific program, the owner gets money up front (working capital) that they can now use for their business-related expenses. Repayment terms depend entirely on factors such as the qualification amount, and the program that the owner decided on going with.
It’s easier than you think! Most banks don’t like funding smaller companies anyway, so if you landed on this post, we are glad to you’re here! Coast Funding offers a wide range of funding solutions so we can truly tailor the merchant experience and provide a solution that fits their unique business needs. If you are ready to apply, we have a quick, streamlined application process that will only take a few minutes so you can go on with your busy day. From there, one of our funding advisors will reach out to you to get to know you and your business so we can get to work and do our part to get you the help you need.
This content is for educational or informational purposes only and should not be taken as legal or financial advice. The information in this content does not necessarily reflect the views of Coast Funding Services LLC or its partners.