How to fund your side hustle
From diversifying your income stream and living your passion to having more flexibility and freedom, there are many reasons for having a side hustle, and with so many options available, now is a great time to start one.
However, at some stage, you’re likely to need access to cash. You might need start-up capital to buy stock or equipment or pay for training. Alternatively, your side hustle could be doing well enough to start expanding.
Two popular options are a personal loan or a business loan, which could give you the traction you need. Here’s what to consider when choosing one to propel your side hustle forward.
What is a personal loan?
A personal loan is an amount borrowed from a bank or financial institution that you agree to pay back in predetermined monthly payments for a set period. Your credit history is used to determine whether, and at what rate, you can get a loan.
You receive the money in one go, and you can use it for anything personal or business related, e.g., you can use it to consolidate debt so that you can free up cash flow, pay for a course or buy stock to get you started.
Advantages of personal loans
- You can access money quickly and easily
- You don’t need to provide collateral
- Faster approval
- Flexible terms and personalised interest rate
- Borrow up to R300 000*
- You can apply online or on our Banking App
What is a business loan?
A business loan is an amount borrowed specifically for activities or expenses related to your business. With a business loan, you will unlock larger credit facilities that are tailored to the needs of your business. Both you and your business will be assessed as part of the credit application, which will take into consideration credit worthiness as well as the track record and financial stability of your business.
Advantages of a business loan
- Helps you keep your business and personal finances separate
- Allows for collateral as security, which enables larger loan amounts at better interest rates
- Interest paid is tax-deductible
- Longer and more flexible repayment periods
Choosing the right loan
The type of loan you choose depends on your needs and your business goals.
| Personal loan | Business loan | |
|---|---|---|
| If you need access to cash fast | X | |
| If you don’t have/want to put up collateral | X | |
| If you need it for business and personal expenses | X | |
| If you’re just starting and have good credit | X | |
| If your side hustle is established | X | |
| If you want the lowest rates | X | |
| If you need a large amount of money to pay off over the long term | X | |
| If you need cash flow | X | |
| If you want to grow or expand your business | X |
Before applying for a loan, use our personal loan calculator or business loan calculator to estimate whether you can afford to borrow money, what your repayments could be and which option would suit your financial needs.
Next steps
Apply for a personal loan online or on our app or speak to your business banker about a business loan for your needs.
*Terms and conditions apply.