Business owners sometimes take out personal loans to fund their business. Mixing personal finances and credit with business can cause complications down the line.
If you work with an equity partner (or co-owner), you may give up some control of your business and will likely forfeit some of the business profits or gains made if you ever sell the business. With a small business loan, you maintain full control of your business and any potential profits.
Borrowing from friends and family can be fraught with challenges. The family member may view themselves as a part-owner with the power to call the shots and make decisions. It can be awkward to mix familial and business relationships. Taking out a loan from an independent organization helps avoid these issues.
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