Borrowing Money from a Loved One for Your Business? Think Again

Posted by Digital on October 24th, 2018

There may be times when you’ll find yourself in need of some extra capital when running a small business. Whether you just opened a small business and need small business financing to grow your sales and business. It is always vital to have money in hands.

You might have considered borrowing money from your family or friends. While this may look like a perfect solution, it could cause a strain amid you and the person you’re borrowing from. Consider the potential risks of asking a loved one for money for your business, instead, apply for a small business loan.

Borrowing money from family or friends for your business might seem like a win-win situation. Regrettably, this could become a source of pressure which will end up jeopardizing your relationships, so apply for business working capital loan from a lender instead.

The individual you borrowed from may not understand the time frame or period it will take to pay back. They may not know the wide variety of costs your business generates. You would consider repaying the debt as soon as possible, which may cause unnecessary anxiety. Applying for a small business loan will ensure that you won’t be monetarily drained and have a fixed time period to return the debt without any external pressure. If you borrow from a loved one, they may expect you to repay the entire amount as soon as possible, which may not be possible.

Even if you don’t have a collateral, you don’t have to worry about getting funds for your business because there are unsecured business loans provided by FinTech companies . These lenders will be able to evaluate the financial health of your business and provide business funding. Though you’ll likely have consultative support from the lender, it won’t be too close to home, like borrowing from family or friends!

Hopefully, you’ve been able to determine that borrowing from someone close to you might not be the best option. Apply for a working capital loan or an unsecured business loan as per your need from a FinTech lender, and you’ll receive the money you need, without any family drama ensuing!