First, what is a business loan and what is a joint partnership? A business loan is a loan uniquely designed for business purposes. It is designed only for companies, not individuals, to use. A joint partnership refers to an association of at least two people who agree to be co-owners of a single business. The amount of money you can generate for your company is solely based on the person with whom you go into business.

Some aspects of your company that are taken into consideration when you apply for a business loan include your revenue, credit history, and business plan. Though these are all important, it is most likely the sales of your business that will help determine the amount and type of loan you are eligible for. While neither side has a significant advantage over the other, there are plenty of pros and cons of obtaining a business loan versus financing through a joint partnership.

Pros:

• Of a Business Loan
As mentioned above, a lot of stock is put into your business’s current sales. If you can demonstrate positive growth, then your ability to get a loan that has a low APR and sufficient capital to fulfill your requirements is possible. Though plenty of other factors are considered, some business loans can be upwards of millions of dollars to supplement just about any demand you could have for an existing company. There is a set timeframe to work within as well, making a structured and clear path for you to complete your end of the loan agreement.

• Of Financing through a Joint Partnership
Some of the perks of a joint partnership are specifically based on the person you go into business with. Terms and conditions are based upon what the two parties agree on. Though all parties are aimed at making profit, there is generally some flexibility in all facets of the contract. If you are looking for an agreement with more leeway over the long-term, the right partnership could grant that.

Cons:

• Of a Business Loan
Though small business loans can be great for people with poor credit, higher APRs can also cripple your ability to climb out of debt and repay your loan, which will only exacerbate your bad credit score. SBA loans also may require more credentials than you are able to provide. The longer you are in business and showing profit, the easier it will be to get the type of loan you want. But typically, there are brackets that business fall under based on the criteria previously mentioned which prevents them from obtaining certain types of loans.

• Of Financing through a Joint Partnership
One of the biggest negatives associated with this path comes from the loss of equity. Instead of paying down a loan, you are permanently giving someone else part of your company. It also comes with a loss of individuality; that is to say, you can no longer act according to your own wishes, because you must consult with business partners before making important decisions for the company. Though this isn’t necessarily a negative, it is important to note that partnerships do not have an end date. And finally, if the person you go into partnership with decides to pull out or their financial situation changes abruptly, it could have negative ramifications for your company.

How to Apply for A Loan

These are some of the pros and cons to consider when determining between financing via a business loan or through a joint partnership. Partnerships tend to be for people who already know of an investor who would be interested in buying into the existing company, whereas business loans are more suited for someone looking to advance on their own. The main factor that many people fall back on is credit. Although you can still receive a business loan with poor credit, your best option might be to find a company that specializes in helping owners without top-notch qualifications. Usually, they are the type of company that offers a quick loan, available in minutes. However you get your business funding, do your research in order to make the decision that is best for the long-term growth and success of your business.