3 Ways a Personal Loan Can Help Launch Your Side Hustle

Angela Mae

Thu, Jun 5, 2025, 9:03 AM 4 min read

In this day and age, it’s remarkably common to find people with a side hustle. According to PYMNTS Intelligence, around 40% of Americans have a side gig.

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Some side hustlers earn only a few hundred dollars a month, while others earn much more than that. Forbes found that the average side hustler brings in about $12,689 a year — a little over $1,000 a month.

If you’re hoping to supplement your regular income or even build a small business someday, using a personal loan could help you get started with a side hustle.

Are you interested in crafting and selling the things you make? Building up inventory for a reselling gig? Or maybe you just need upgraded tech to keep up with your hustle’s needs. Whatever your gig, you’ll probably need some equipment and inventory to get you started.

You can use a personal loan for nearly any reason — provided the lender doesn’t stipulate against it. This means you can use the funds to purchase inventory, supplies, equipment and more.

This is good news for those who want to sell digital products, too. After all, you might need to pay for things like website hosting, tech equipment or software programs to make courses, books and other products.

Notably, personal loans come in all sizes, ranging from as low as a few hundred dollars to $100,000 or even more.

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If you want to launch a side hustle that will eventually become a business, you might need financing. For some small business owners, this comes in the form of a business loan.

Small business loans often have stringent requirements. For example, your business might need to be at least two years old or bring in a certain amount of revenue — things that just aren’t feasible for new side hustlers.

A personal loan could be a way to get around the strict funding criteria. They’re usually easier to get and, like business loans, you’re still responsible for paying back what you owe, usually with interest.

“One thing many people don’t know is that small business loans typically require a personal guarantee, so even if you’re able to get a business loan, the owner’s typically personally on the hook anyway,” said Carolyn Katz, who runs the funding group at Score NYC, an SBA-sponsored nonprofit. “And the SBA [Small Business Administration] loan process can be quite time-consuming. So often, for manageable amounts of money, personal debt can be faster and more flexible than business debt.”