The financial landscape offers various products, which adapt to different projects and needs. For this reason, knowing the differences and advantages between forms such as business credit and personal credit can be essential to obtain the necessary financing.

According to figures from INEGI, in 2021, 47% of companies have chosen to seek financing, since starting their operations. For this reason, it is important to find good sources of financing for a company and choose the best options.

Here you can see more about the differences and advantages between business credit and personal credit, to make sure you choose the most convenient option.


Business credit vs. Personal credit

Each of these types can offer certain benefits in the eyes of an entrepreneur. These are some of their main differences.


Different purposes

Personal loans are for private use and normally seek to cover an emergency that has arisen unforeseen, or to acquire some asset for which, at the moment, there is not enough capital.

On the other hand, a company’s sources of financing are focused on large business projects. Business loans seek to finance larger-scale operations, providing the necessary capital to boost a company. For the same reason, they are requested on behalf of the organization.

This same reason produces that, between the two financing modes, there is another fundamental difference.


Difference in amounts and terms

Personal loans, being designed to cover simple expenses, do not usually handle large amounts. In addition, the payment terms are usually shorter and the interest is relatively high.

The business ones handle higher figures and in longer terms. For this reason, they tend to be more customizable, according to the needs and deadlines of the project.


Variation in requirements

Although the requirements vary from entity to entity, in general personal loans require that the individual requesting it have, and can demonstrate, a good credit history.

On the other hand, credits for companies, apart from this requirement, require documents related to the legality and operation of the business, that it issue invoices and that it be registered with the SAT.


Which is better?

Generally speaking, as might be expected, it depends on the project. Although a personal loan may seem tempting to avoid going through the accreditation processes of the company, it does not really fulfill the same purpose.

For those who are looking for capital for their business, requesting a personal loan can be a serious mistake. A business financing will be better adapted to the terms and figures that a business needs to be able to take real momentum.


Online credits for companies: an ideal option

If your business is young and you do not require or can manage large capital, instead of opting for personal financing, the Merchant Cash Advance offered by Pymes Capital can be a great option.

Pymes Capital Financing is a friendly alternative to SMEs, with flexible terms and a payment system based on the sales of your business, in addition to affordable requirements. Your online credit application works quickly, with simple requirements.

All you have to do is fill out the web form and present a SAT account, credentials from your POS provider and 6 months of operations (at least). Learn more at Pymes Capital and take your business to the next level.