One of the key differentiators is that you qualify for a personal loan based on your own credit score and personal income, while the qualification for a business loan depends on a broader range of criteria related to your small business. These can include things like business history, business income, business credit, your specific industry, and bank account activity.
Aside from the qualifying stage of the loan, here are a few more differences worth noting:
Business loans may require a guarantor to sign for the loan, while personal loans rarely do.
Business loans are often required to be repaid faster than personal loans.
Business loans often have higher monthly payments because of the shorter repayment period.
Business loans have higher lending limits than personal loans.
If you’re interested in how business loans and personal loans have become more like each other in recent years, it’s the application process. In the past, business loans required mountains of paperwork and agonizingly long waiting periods, while personal loans were much easier and faster to acquire.
Luckily, this is no longer the case. Lendio was founded on the idea that small business financing should be as convenient as possible and that loans should be available to everyone who needs them. So we went ahead and created an innovative process that limits the paperwork, speeds up the application, and provides more loan options. Get started now and you’ll be comparing business loan options in just a few minutes.
Our goal is to help small business owners have all the tools and knowledge possible about loans. We've connected to hundreds of banks to keep you up to date with the best loan offers and options for your business!