Financing your own business idea is not an easy thing for many founders. You can only get a loan from banks if you have no credit bureau entries and can show collateral.
On the other hand, if the business idea is rather unusual and you don’t have a lot of collateral yourself, banks nowadays tend to get in the way.
You can find out below whether a payday loan for the self-employed is a good alternative in this case and what the advantages and disadvantages are.
Payday loans for the self-employed
The world is changing. Not only have the publication options improved radically, but the power of the banks has also decreased in the financial sector.
In recent years, payday loans have developed as an alternative to bank loans. The money does not come from a bank, but from more or less many private individuals and investors.
The idea itself is not that new. Anyone who used to get a loan from Grandma for the new company also used a payday loan.
In the meantime there are even special intermediaries for payday loans for the self-employed and start-ups.
Meaningful or not?
Like everything, payday loans have advantages and disadvantages.
The chances of getting a payday loan are often much better for start-ups and self-employed people than getting a bank loan. In addition, there are of course significantly more potential lenders for payday loans.
With a payday loan, it is also much easier to finance rather unusual business ideas. Private investors are often even more open to creative ideas than boring Me-Too start-ups.
A payday loan is more flexible. This not only affects the amount of the interest rate and the repayment period, the question of collateral can also be negotiated flexibly.
The flexibility of course also has the disadvantage that you may pay too much and get even more into debt. Here it is important to compare well.
The costs can fluctuate greatly and especially with the many payday loan brokers that are now available on the web, you should take a close look at what costs are incurred. Also and especially when a loan application does not lead to success.
The advantages of payday loans cannot be denied. However, one should proceed at least as carefully and exactly as with a bank loan.
If you cannot repay a payday loan and get into debt, this has the same negative effects.