business loan

If you are an entrepreneur or a small business owner, sometimes a little extra cash can really come in handy. If you only need a relatively small amount money, for example under $5,000, then a personal loan is probably a much better option for your business as long as you do not get yourself too far into debt.

Create an Emergency Fund

It is inevitable that sometimes, bad things happen to good businesses. If you go to a website like personal loans and they match you up with a lender who offers favorable terms, it may be in your best interest to borrow the money while interest rates are low and set it aside for when you run into problems. As long as the monthly payments do not stretch your budget, it might be worth paying the interest rate in order to have money set aside for when something bad happens or your cash flow is running low. Of course, once you pay the loan off, then you have a fully established back-up fund.

Invest in New Equipment

How many hours per day do you spend fighting with an old PC that runs horribly slow or some other piece of equipment that does not work as it should? That is a horrible waste of time for a business owner. You could take out a small personal loan and replace your old equipment or buy new technology to improve your business. Yes, admittedly, you do pay costs for taking out the loan. However, your time as a business owner is too valuable to squander fighting with poor equipment. Unless you are really strapped financially, you would be much better off to buy equipment that works so that you can spend more time concentrating on running your business.

Diversify Products or Services

In order to keep up with your competition, you may find that you need to add new products or services. However, these new options involve spending money. In most cases, either you have to invest in new inventory or you have to pay to outsource some services to a third party. Both represent significant expenses that can really cut into your cash on hand. It may be simpler to visit a site like, or any of the others mentioned in this article, and take out a personal loan. If the new products and/or services do well, then you can increase your loan payments, pay off the loan quickly, and enjoy the additional profits.

Expand the Business

Maybe you want to add an online ecommerce site or hire someone to help you run your business. Websites like can connect with you with private investors who will be willing to offer you a loan. Although you do have to have a good credit score to get a loan through one of Prosper’s investors, they each also have their own criteria for determining whom they are willing to invest in. If you can make a strong case for how the money will you help you grow your business, you might be able to get a better interest rate than you would by getting a bank loan. Taking out a loan will help you split your expansion costs into payments so that the money does not come out of your pocket all at once.

Launch a Marketing Campaign

You may be happy with the customers you have, but it wouldn’t it be nice to have more? Both entrepreneurs and small business owners have to market themselves in some form or another. Marketing can be a huge expense and you have to make a commitment to consistent marketing in order to see a good return on your investment. For example, say you want to hire an Internet marketing company to help you build your web presence. They typically require customers to commit to a contract of at least six months to a year. If you can pay them for the contract in one lump sum, you may be able to get a nice discount that offsets the cost of your loan interest.

You should determine if the personal loan is going to help your business more than it hurts your budget. In many cases, you may find that it is wiser to take out a loan so that you can spread your costs out monthly rather than risk running your cash flow too low. As with every business decision, you have to weigh the pros and cons and decide what is best for your situation.

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