Can I use a personal loan for business and vice versa?
Larger loan amounts — If you need a larger loan, you’ll want to consider business loans. Personal loans rarely exceed $50,000, and even that amount can be difficult to qualify for.
Lower interest rates — If you qualify for the best business loans, you’ll probably get a lower interest rate than you would on a personal loan. According to Nav, the interest rates for business loans from traditional lenders ranges from 2% to 13%, while personal loan interest rates range from 6% to 36%.
You can usually use a personal loan to cover any business expenses. Keep in mind that you’re still personally liable for repaying that loan — not your business — and it might be more difficult to separate your finances this way.
On the other hand, some business loans might restrict you from using your funds for non-business expenses. Others are less restrictive and make it easier for you to pay yourself in the form of a salary using your business loan.
How to get approved
The approval process is slightly different for personal loans and small business loans. (more…)