aspiring entrepreneurs

Should I get a personal loan to take care of my small startup expenses? Everything You Need to Know

Although it can be tempting for aspiring entrepreneurs to take out a personal loan for their small business, it is always good to understand all the potential risks and aspects.

Starting even a small business is a tough row to hoe. New entrepreneurs need meticulous planning, enough time, and liquid money to meet unforeseen situations. However, they often find themselves short on cash. Fortunately, they have multiple funding options, out of which seeking a personal loan seems a wise and convenient decision.

Although it can be tempting for aspiring entrepreneurs to take out a personal loan for their small business, it is always good to understand all the potential risks and aspects.

Personal Loans – An Overview

Personal loans are targeted at individuals who can use them to cover the cost of anything that’s critical to their personal circumstances, such as education, home renovation, wedding, emergency, etc. Borrowers get the flexibility of using the money for any purpose but they might have to explain the plan for using the amount when they apply for the loan. Personal loans carry a lower interest rate than credit cards but the final rate can vary according to the credit score. A higher credit score can get you a lower interest rate and more favourable repayment terms.

Raising a personal loan for self employed or startup is dependent on several factors that must be considered meticulously by borrowers.

Should I Take Out a Loan to Start a Business- Factors to Consider

If you are planning to take a personal loan for your business, make sure to look into the following aspects:

Requirement of Loan Amount

If you don’t need a huge amount, opt for a small business startup loan as the process for applying for it is seamless and straightforward. Moreover, a particular personal loan doesn’t involve the lengthy documentation process that most business loans require.

Liquidity of the Business

Another factor you must consider before applying for a personal loan for starting a business is liquidity. If you are educated enough and familiar with the right application process, you can leverage this debt instrument to kickstart your journey as an entrepreneur. In case you are not aware of whether your business is liquid or not, apply for a personal loan and use low-interest-bearing as a safety net.

Expected Repayment Time

If your business is facing a temporary shortfall in money, then also a personal loan is recommended. If you can repay the amount within the given time, then go for a personal loan.

Although business loans take care of such requirements, personal loans are easier and hassle-free to get.

Amount Invested in the Business

You have various options to fund your business but the most important thing is to keep track of the money you have invested. Even if you are not taking a loan, make sure you have proper records regarding the flow of money to keep things smoother in the future.

Collateral

Another advantage of a personal loan is that it is unsecured which is not the case with business loans. So, if you don’t have collateral to provide as security, personal loans are a good option.

Can I Use a Personal Loan for Business Expenses?

Now that we have answered the common question, “Can you use a personal loan to start a business?”, it’s time to answer, if you can use this loan to meet business expenses. The simple answer is yes, you can cover your business expenses with a personal loan. Once your loan application gets approved, it’s your choice to use it any way you want, be it for inventory or to pay rent. However, in such a situation, make sure that you take out the loan with the lowest interest rate.

Conclusion

For a startup, both business and personal loans make sense. The factors that matter the most are the money you need, the interest rate, and how much ready you are to put your personal credit on the line. Also, you must be careful while reading the terms and conditions of the loan. In case of any confusion, clear the doubts with the lender and invest sufficient time in planning the budget of your business.

Author Bio: Tanvi Kaushik specializes in Content Marketing and works with the Digital Team at KreditBee – India’s fastest personal loan platform where self-employed and salaried professionals can easily avail of personal loans in just a few minutes when in need of quick funds. Tanvi writes to-the-point articles on personal finance and budgeting which are truly appreciated by her readers. She is committed to making money matters easy to understand even for the layman. Her commitment to her work doesn’t stop her from pursuing her hobbies of hiking, trekking and going on adventurous trips.

Seven Green business ideas: A new wave of social entrepreneurship

Many aspiring entrepreneurs are looking forward to developing green ways to save energy consumption and save the environment.

Let’s face it: More pollution and the exploitation of natural resources have a negative impact on the climatic cycles. It is leading to the systematic dismantling of the environment. The unsustainable lifestyle of the people has added more to this problem.

Fact check: As per a UN report, nearly 98% of the cities with more than 1 lakh inhabitants come under the air quality guidelines of the World Health Organization.

However, many aspiring entrepreneurs are looking forward to developing green ways to save energy consumption and save the environment. For this reason, green business ideas are picking up the pace right now.

Today, even the customers are ready to pay more for green/sustainable products or services. All this helps in making a positive impact on the environment.

Are you the one who wants to change the world by having a business that also makes money? Welcome to the right place. Here we have come up with green ideas to bring a new wave of social entrepreneurship. Without further ado, read ahead and fetch yourself with all the answers.

Ecological disposables – Environmental degradation has seen an increase in recent years. And it is a huge concern, globally. To reduce pollution, ecological or environmentally-friendly disposables are actually a good idea. Your customers can throw away these disposables after using them, and it causes no harm to the environment.

They are pure, biodegradable, decompose faster, and ultimately don’t contribute to any environmental pollution. The world is facing a global climate change emergency, and you can’t afford to pollute the environment at this time. Right? So, tackle the climate changes with ecological disposables.

Dry cleaning and ecological laundry – In this busy world, only a few people have the time to really dry clean their clothes. For this reason, you can start with the dry cleaning services at the street level. And if you use machinery that uses less water (nearly 20% less than the traditional dry cleaning machines) and biodegradable detergents, you are helping the environment.

With the use of sustainable equipment, you can reduce not only the electricity consumption but also your fixed expenses. Therefore starting dry cleaning and ecological laundry services might help you to stand out from the rest.

Organic crops – Organic farming has taken the world by storm. And many small producers are joining the world of organic markets. What you can do here is – you can begin your own cultivation of vegetables and ornamental plants, starting with an area of just 5m2. Or you could also start selling grains like wheat, rice, barley, etc.

For this, you will need to store grains in a safer place. So, you can look for small grain bins for sale and make this green idea work. Additionally, you need to know several cultivation methods like hydroponics or gardening. And also gain knowledge of plant nutrition and pest control.

Now, you can sell these grains, vegetables, or plants in the local market or supply centers. Investing at least 20 minutes a day for every square meter you plant can do wonders for you. Also, do not forget to market your products in the end.

Solar panels – Many consumers are moving towards installing solar panels on their homes to save energy and to save the environment. Hence, here comes the next green idea – giving the opportunity to the people to have a solar panel at their homes.

Furthermore, it will mitigate air pollution, slow down climate change, and lower down the consumption of fossil fuel. And who would not like to contribute towards environmental safety?

Green walls – Nowadays, having green walls is a rising new trend. Having green walls means incorporating living nature into the urban environment. It gives a much appealing look to the walls and serves other benefits as well. They come to fulfill various purposes like for indoors, for outdoors, or the varieties are endless. This business requires placing natural plants on the interiors and exterior walls of an office or home, among others. It is worth noting that preparing the walls with a coating is necessary to avoid humidity and the generation of insects.

You will also need to take care of the installation of the hoses for the self-watering of the wall. Ask the customers to keep in check the maintenance of the vertical garden during the first three months. This will ensure them if the plants are growing correctly.

Bicycle repair and refurbishing – Not to mention that the carbon footprint is increasing at a rapid speed. So, it is beneficial for the environment to go on a bicycle to cover short distances instead of driving a two/four-wheeler.

You could be the expert cyclists where people can come to get their bicycles repaired as sometimes bicycles also need a tune-up. Or there is another way round. How about purchasing the older bikes at a reasonable cost and fixing and selling them up at a profit? This green idea will definitely work well for you.

Gas savers – There is no doubt that gasoline and electricity prices will continue to rise in the future. How can you help the citizens facing this issue? You can give them a discount on opting for the facility of the installation of the gas savers. This will allow them to save at least 12-15% on the regular consumption of gasoline.

The equipment for this purpose is installed in hoses or tubes to pass through wiring in less than 10 minutes. Start offering these services to the relatives and then expand your reach to schools and restaurants.

To sum it all up

It is needless to say that going green has immense possibilities in terms of delivering something better to the environment. Moreover, it makes our planet a safer place to live in and caters to the needs of the growing market. You do not want to deteriorate the quality of the environment as it is said by George Holland – “Where the quality of life goes down for the environment, the quality of life goes down for humans.”

So, protect it with all the great business ideas that you can, and you will experience a fresh and green planet.

5 productivity tips that will benefit aspiring entrepreneurs

If the captain of the ship is accomplished and tends to be productive all the time, there are better chances of a successful venture.

Indian entrepreneurship is currently on a high with a huge number of start-ups cropping up daily. Most start-ups have innovative and unique ideas but some fail, owing to various reasons- time issues, low of monetary funds or other resource crunches.

An entrepreneur plays a key role in determining his venture as a failure or a success. If the captain of the ship is accomplished and tends to be productive all the time, there are better chances of a successful venture.

Here are 5 productivity tips that are bound to help every budding entrepreneur:

1. Don’t attend or organise meetings for the sake of them

In today’s world, we are not in a position to take the traditional route of meeting a team for 5 hours and giving them tips about everything. Time is a precious resource and must be utilised carefully. Because most meetings are a waste of time, it is beneficial for an entrepreneur to cut down on them and organise modern ways of boosting team spirit like stand-up meetings.

Also, try communicating through faster, more efficient and time-saving media like the telephone, e-mail, SMS or shared notes on apps.

2. Take breaks

As an entrepreneur, your work might seem insanely taxing. However, it is crucial to take necessary breaks for your brain to relax and produce newer ideas. Try and take breaks every two hours and it can be something as simple as going out for a brisk stroll. The fresh air will rejuvenate your mind and help you focus and concentrate better on work. You will find yourself more energised after a break because staring at a computer screen for too long can cause massive fatigue.

Also, insist that your employees take breaks too, especially if you’re a creativity-based company as breaks are necessary to break monotony and loss of focus.

3. Use location to an advantage

For start-ups which usually don’t have much monetary funding initially, it is always better to hire a team or people who are locals. Many studies have found that people living with family or near their offices are more motivated to work as they have people to fall back on once they’re home.

Also, once you nurture local talent, you’ll be amazed to find the level of motivation they possess as they know the place and people better. And, once you have a kickass team which comprises of accomplished and happy people, your profits will soar higher.

4. Delegate; but give your employees space to improvise

As an entrepreneur, your job is to delegate tasks to your team but if you make them follow a rigid pattern of doing the task, they’ll soon lose interest. Instead, give them some amount of creative liberty to improvise and come up with newer ways of accomplishing a task. This gives them responsibility and power and helps them to learn the skill of management.

Because empowerment is something we all seek at our job, this will motivate employees to put in more effort into their job and be more productive in future.

5. Rewards and benefits for your employees

It might be something as simple as treating them to a meal at a fast food joint because they’ve worked hard. Rewarding and more importantly recognising the talents of your employees is crucial as it gives a great boost to them as they remain motivated to work harder.

You could also provide some kind of monitor to your employees to jot down creative ideas. This is a great productivity booster as it empowers them and entices them to be more motivated at work.

Try the tips mentioned above and notice a stark change in your company’s productivity levels.