Starting a business is an exciting journey, but it often comes with one major hurdle – funding. From launching a new product, entering a new market or even renting a workspace, you need capital to take those important steps. While traditional business loans might seem like the go-to option, personal loans are a convenient alternative especially for first time entrepreneurs just starting out. Here’s how personal loans can help you kickstart your entrepreneurial journey, their benefits, and how you can use them effectively.
New entrepreneurs often face rejection from banks due to a lack of business experience or credit history. A personal loan bypasses this requirement. Since it’s evaluated on your personal income and credit score, you can access funds without needing to show business revenue or financials.
Unlike business loans that involve extensive documentation, a personal loan can be applied for entirely online. IDFC FIRST Bank operates a 100% digital process for personal loans, with instant approval and disbursal within 30 minutes, allowing you to access funds when you need them most. All you need are your PAN and Aadhaar numbers for application, and your physical PAN card for video KYC. You can also foreclose the loan early with zero foreclosure charges.
The best part of a personal loan is that you can use the funds in any way you want. There are no restrictions or categories like in some business loans. The decision is completely yours whether you want to use it for medical, wedding, education, travel expenses or any urgent needs.
As an unsecured loan, personal loans don’t require you to pledge any assets. That means you don’t need to risk your home, gold, or property to fund your business, a key benefit for entrepreneurs just starting out.
With fixed interest rates and customizable repayment tenures, personal loans offer predictability. You can plan your finances better, knowing exactly how much you’ll repay each month.
Personal loans give you the freedom to fund different areas of your startup. Here are some smart ways entrepreneurs can use personal loan funds:
Even a small business needs a base of operations. Whether it’s converting a room into an office or renting a co-working space, a personal loan can help cover the setup costs, furniture, utilities, and internet, making sure you have your ideal space to work.
Product-based businesses often need upfront investment in inventory, raw materials, or machinery. A personal loan gives you immediate access to funds so you can purchase the essentials without delays.
Sometimes, you need a helping hand to get off the ground, be it a content writer, web developer, accountant, or operations manager. A personal loan can help you pay for contractual hires or freelance support in the early stages.
Whether it's running ads, designing a logo, or printing packaging materials, branding is essential for a new business. With flexible personal loan funds, you can invest in professional marketing assets that boost credibility from day one.
There are several legal and compliance costs involved in starting up, such as registering your business, applying for licenses, and getting GST or tax registrations. Personal loan funds can help you clear these formalities quickly and without stress.
A great idea needs more than passion to succeed and most of all, it needs capital. For aspiring entrepreneurs, personal loans offer a fast, accessible, and flexible way to kickstart a business without waiting months for a business loan approval or risking personal assets. Check your personal loan eligibility to get started. With competitive rates, fast disbursal, and minimal paperwork, a FIRSTmoney smart personal loan by IDFC FIRST Bank makes it easy for you to take the first step toward entrepreneurship.
Disclaimer: This article is published in association with IDFC FIRST Bank and not created by TNM Editorial.