{"id":122981,"date":"2017-06-13T20:14:26","date_gmt":"2017-06-14T03:14:26","guid":{"rendered":"https:\/\/www.finder.com\/uk\/?p=122981"},"modified":"2026-02-17T14:59:16","modified_gmt":"2026-02-17T14:59:16","slug":"personal-loan-for-business-use","status":"publish","type":"post","link":"https:\/\/www.finder.com\/uk\/business-loans\/personal-loan-for-business-use","title":{"rendered":"Can you use a personal loan for your small business?"},"content":{"rendered":"

Starting a business is no small feat. You\u2019ve probably already done the planning and the paperwork. But how do you go about actually getting your products or services in front of the masses?<\/p>

To be eligible for a business loan<\/a>, you\u2019re typically required to be in business for a minimum of a year, sometimes two years. Between this requirement and minimum annual revenue eligibility, it can seem impossible to get funding. But don\u2019t give up \u2013 there are still options to explore. <\/p>

Taking out a personal loan to fund your business might have crossed your mind, for instance. Because personal loan funds are transferred to you as an individual, the state of your business isn\u2019t considered. Instead, providers will look at your personal credit score and financial circumstances. The downside is not all lenders will allow you to use a personal loan for business purposes.<\/p>

Can I actually use a personal loan for business?<\/h3>

Yes you can \u2013 but you\u2019ll need to do your research as many lenders will reject your application if you\u2019re planning to use your personal loan to start a business. Major banks which offer both personal and business loans, for example, will prefer you to use personal loans for personal use, and business loans for business use.<\/p>

One of the main personal loans you can use for business purposes is the government-backed Start Up Loan. This is designed to help those looking to start a business or grow an existing one, but it\u2019s a personal loan. You can borrow between \u00a3500 and \u00a325,000 over 1 to 5 years. <\/p>

Should I use a personal loan for business reasons?<\/h3>

Before you use a personal loan for business purposes, there are some things you need to consider. <\/p>

For a start, consider the conditions the loan could come with. The biggest one is that your name \u2014 not your business name \u2014 is attached to the loan. This means you will be personally liable for repaying the loan \u2013 not your business. If you fail to repay it, you could damage your personal credit score. <\/p>

You should also be honest and upfront with your lender about the purpose of the loan. Some lenders may order you to pay back the loan immediately if they discover you misled them.<\/p>

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Using a personal loan for business reasons can make it more confusing when it comes to filing your tax return as there\u2019s less of a distinction between your personal funds and your business money.\u201d<\/p>\n