From the course: Financing Your Business

Personal loans

From the course: Financing Your Business

Start my 1-month free trial Buy for my team

Personal loans

“

- A personal loan is not ideal, but it's very common. Many businesses start with personal loans. Now, remember when you borrow a personal loan, you may impact your personal credit. You're not separating your business or personal credit, And if your business fails and you default, the lender can try to go after you personally. That means they could try to go after wages when you get a job. They could try to take money out of your bank account if they successfully get a judgment against you. In other words, your debt won't end, just because you close your business. Many business owners also turn to home equity. Just keep in mind that if you can't pay back your home equity loan, you literally could lose the roof over your head. So make sure you feel comfortable putting your home equity at risk. Having said that, many traditional lenders will often want to try to get personal guarantees from you and your business and may expect you to pledge your home equity as collateral. So make sure you and any other family members who would be affected understand what you're getting into and have carefully weighed that risk.

Contents