Since you’re here, you’ve either already an established plumber or you’re looking to start your own plumbing business. And because of this, you’re likely looking into the types of loans you should get; and maybe even the types you should avoid.
In today’s world, there are dozens of loans available. And it can be pretty challenging – or at least time consuming – to go through all of the information. You’ll see options like SBAs, startups, lines of credit, personal loans, and so on. It can be exhausting figuring out which ones make the most sense and which ones you should steer clear of.
And while I’m sure most of us can come to pretty decent conclusions about what a personal loan is used for, I’ll quickly go over what exactly it is. So personal loans are more-or-less considered “unsecured.” This pretty much means you don’t need to offer up your car or house in case things go poorly – and to put it more simply, you don’t need collateral to get one.
To determine whether you even qualify for a loan, financial institutes will look at your credit score. And let’s just say you are looking for a personal loan, these places are typically looking for anything +660, but are willing to check out scores between 600 and 800.
But to get back on track, personal loans are used for anything ranging from credit card debt consolidation, getting some housework done, replacing equipment, and installing energy efficient appliances – pretty much whatever you can think of.
However, just because you can get a personal loan for just about anything, it doesn’t mean that you should. And to figure out whether a personal loan would be good for financing your plumbing business, I’ve written down some pros and cons below.
Should you get a personal loan as a plumber?
Pros of a Personal Loan
Having the ability to use these loans for basically anything you can think of offers a ton of flexibility to you. Need some refurbishing done? How about an addition to the house? Personal loans cover it.
You can get them very fast with a minimum amount of effort as long as you have decent standing credit.
As much as I’m sure you love paperwork, I’m going to say it’s a positive that applying for one requires a minimum amount of documentation.
You don’t need collateral. If you default, you’ll still have your home or car. I’d like to think that’s a pretty big positive.
Cons of a Personal Loan
These are risky for lenders. So in turn, the interest rates are much higher than other options out there.
You can’t do any partial payments and you absolutely have to pay for the entire duration of the agreed upon time. Which means you’ll be dealing with the aforementioned interest.
You need to have pretty great credit scores. Lenders probably won’t even look at you if your credit isn’t in the ideal range we talked about above.
Interest definitely depends on your credit score. The better your score, the less interest you’ll be paying. But if you’re right on the border, your interest will be a lot higher.
So would a personal loan be good for your plumbing business?
Probably not. While they’re great for renovations and other household related projects, I wouldn’t recommend them for starting a business; however, there are tons of other options out there that would fit the bill.
Since you’re looking into a loan for your plumbing business, try SBAs, Business Express Lines of Credit, and even Equipment Loans at Finance Factory.
Finance Factory has a team of highly trained professionals who guide and educate clients so they can make the best and most informed decisions possible when looking at loans. They help you every step of the way and give you all of the information for your application. Their specialty is making and building relationships between small business owners and vetted lenders while offering great rates and affordable terms for everyone.
Interested in finding funding for your business? Finance Factory would love to help! If you’re looking to fund your business within the next 30 to 90 days for $25,000 to $500,00 and have a credit score of 660 or better, let’s chat! Get pre-qualified right now with our quick-step pre-qualification form! And don’t worry, this will not result in a hard credit inquiry of sensitive information. We just want to learn more about you and your business. Click below to get started!