Bayport Blog

Your big small business dream can come true

How much longer are you just going to dream about the business you want to have? Take the plunge with an unsecured loan and make your business a reality.

Many of us think that having our own business would be great. But for most people it remains a thought. Some, however, have a dream, a vivid picture of what they want to create and achieve. They know they have a killer idea, the talent to make it happen and the business acumen to be successful.

Maybe you are one of those people. You can see in your mind’s eye what your shop will look like. You know exactly what will set your products and services apart from the competition. You even have a name picked out. So what’s holding you back?

Money to start your business can come from a variety of sources: you can use your savings, apply for a business loan from the bank, borrow money from friends or family members, or get a personal unsecured loan.

When it comes to borrowing money, steer clear of friends and family, unless both parties are willing to enter into a legal agreement that sets out the terms and conditions clearly and upfront.

Using your savings is an option, but given the uncertainty around a new business, it might be better to not use everything you have. Keep some of it as a safety net in case of a personal emergency.

That leaves you with getting a loan from a financial institution. All banks offer some form of a business loan, but it is usually very difficult to get funding for a business that has no track record yet.

Therefore, to get your venture off the ground, a personal loan is probably your best bet, especially if you have a strong and healthy credit profile that gives you access to preferential interest rates.

Before you apply for a loan, go through these five steps:

1. Get very clear on your business plan so that you know how much money you need to get going. You don’t want to borrow more than is necessary and saddle your new business with a heavy debt burden. This process should include talking to other business owners and learning from their successes and mistakes. Use their experiences to refine your business plan, budget and funding requirements.
2. Understand your own financial position so that you know how much you can afford to borrow. Keep a monthly budget and track all your expenses for several months before you make your borrowing decision. Taking on debt is not something to do lightly – you have to be sure that you can afford it.
3. Be clear about your expectations for your business. Running something as a side hustle to generate extra income is very different to quitting your job and relying on the new business to pay all the bills. This will also determine the size of your loan: a personal loan for self-employment will be bigger than a personal loan for a second income stream.
4. Put in the hard work to do loan comparisons. Different companies offer different deals. It is always worth the time and effort to understand what is on offer and to work out what deal will be the best for you. If you struggle to make sense of all the financial jargon, ask someone to help you.
5. Make sure you understand the full cost of the loan you take out. Ask the agent to explain all the fees and costs to you, including how interest is calculated. Never make a decision until you know exactly what the loan will cost you over the full repayment period.

It takes courage to bring out the entrepreneur in you, and it is very exciting. Enjoy the process, but also keep your wits about you, especially when you take out an unsecured loan to make your big business dream come true.

For more information on personal loans, visit https://www.bayportsa.com/products-services/personal-loans-online/