A business loan is a form of credit offered by various types of lenders for the purpose of business. The level of personal liability business owners have for business loan depends on the type of business registration you have. Read the terms and conditions and be clear on what the loan means for you personally and the business prior to taking it.

Personal loans are disbursed to individuals. The decision to lend is based on your personal financial status and you are fully liable for paying the loan. Use cases for the personal loan are often, but not always, unrestricted- meaning you can spend it on whatever you decide. Business loans on the other hand, are judged based on the business's performance mainly. Sometimes the individuals financial status and credit history will also be required, depending on the business's registration status. Use cases are often, but not always, more restricted than personal loans. Personal Liability for a business loan varies depending on the type of business your company is registered as.

Business loans are offered by a wide range of institutions in Kenya, from digital lenders through to SACCOs, Microfinance institutions and Commercial banks. These institutions will offer different products depending on the stage your business is at and the use case of the loan your business is looking for.

The type of business loan you qualify for is largely dependent on whether your business is formally registered with either a business permit, certificate of registration or incorporation. The second most important factor is how long your business has been in operation. If your business is not formally registered with any of the above documents then your business will only qualify for personal loans.

Business loans can be used for lots of different use cases. General business loans can often be used for any use case within your business, unless stated otherwise in the terms and conditions. Make sure that the loan duration, price and amount match what you need the loan fo prior to taking it.