Can You Start a Business With Personal Debt?

In life, certain circumstances may require the use of credit. Mortgages and college loans are the top debts Americans carry. Credit cards and car loans are also common. Too much debt may affect your chances of qualifying for future loans if your income doesn’t balance it. Raising your income may sound almost impossible, but there are ways. You have considered starting your own business and even developed a solid plan to do so; however, you may need some capital to get it off the ground. Will personal finance woes stand if the way of your entrepreneurial dreams?


The answer isn’t exactly straightforward. Several factors go into starting and running a business. Whether your personal debt will stand in the way of your startup depends mainly on the type of company you start.




Some types of businesses may require money to get started. For example, starting a shop on Amazon or eBay will require the procurement of goods to turn around and sell. Since buying in bulk is far cheaper than not, you’re going to need money to be able to stock your business adequately. With your debt, will you qualify for a loan?


There is no way of knowing if you will qualify for a business loan based on your personal finance situation without speaking with an advisor. If your company plan is going to require a significant amount of money to start, you may be able to borrow at least some of it. You can also seek out investors and sponsorships. If your plan is well thought-out and solid, other people may be willing to invest personally.




Other business models may not require much money at all to start. Many people are finding success in providing internet-based services which draw on their experience. Some of these businesses include virtual assistants, billing and coding specialists, transcriptionists and freelancers. An excellent way to build income without breaking the bank is freelancing. Other than needing a computer and access to the internet, you won’t need to climb further into debt to begin building a business.


While personal finance trouble may hinder your ability to start your own business, it won’t completely stop you. If the business model you have chosen requires money, find investors or acquire personal loans. An alternative is starting a service-based business wherein you can offer skills on a freelance or contract basis. One of the best ways to increase your income and pay off your debt is through starting your own business. Working hard to make it a success may turn out to be what you need to break the debt cycle.

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