Is it wise to start a business with borrowed money?

Borrowing to start a business depend on the person that borrowed the money.
It depend on how the person make good use the money borrowed. If the person use the money to do good and profitable business the person can pay back the money and still fund any business he/she want to do.
Having business idea is very good and if such a person borrow money there is no cause for alarm at all because the money will surely yeid profit.

Starting a business with borrowed money is very common but not advisable because if the business fail to pick up there will be a misunderstanding or bridge of trust with the person you borrowed money from it is said a business man is a risk taker but some risk a not worthy to ba taken.

Yes it does not matter whether you start a business with a borrowed money or not the main skill that matters is your skills and plan ..may people have a start their business with borrowed money such as loans and other forms many have also exploit their own source of income with their own pocket money.

Yes it does not matter whether you start a business with a borrowed money or not the main skill that matters is your skills and plan ..may people have a start their business with borrowed money such as loans and other forms many have also exploit their own source of income with their own pocket money.

starting your business with loan is not bad if you have some financial issues or try to outcome thier circumstances.

Borrowing funds to pay start-up costs benefit business owners because they do not have to rely on personal credit, savings and credit cards to fund new business purchases. Borrowed funds eliminate personal financial risks business owners take on when starting a new operation.

There are a lot of people I have seen or many case studies of people whose investments and businesses crashed after borrowing funds. Business is supposed to be something you have planned over a long period of time and not just wake up one day to do it. No matter how sure a business looks on paper, never borrow money to pitch it instead start by your small savings, from family or better still form a partnership and start small. If you must borrow then it should be a low interest loan payable over a long period of time or no interest at all.

marcusfe said:

There are many people with good business ideas but financial constraint has been their major obstacle. Many of them would have become CEO, while many would have become great business owner but lack of capital has defeated the purpose in them. Since we all know that is always difficult for average citizens to gather enough fund to start a business, is it advisable for such a person to go and borrow a loan to start business.
Though I'm one of the advocate of don't take a loan to start a business, but in this case I feel the average man does not have a choice except he will just forget his business ambition and look for something else.
What do you suggest such a person to do in this case?

Click to expand...

It is not bad to borrow money to start a business but it may be unwise to take a loan from banks or other financial institutions except the business you are starting will start yielding profit in the very very shortest time in order to start start the repayments.
Borrowing from friends and family members or relatives is not a bad idea because they could bear with you and understand you in case you've not started making profits as expected.

Every country have some culture and working style. I don't know about any other countries. but it in India it is very common to get loan to start and run business. Here in India government is also taking loan from public. Most of big business houses in India weather small or bit are taking loan from bank and other financial institute. One friend is asking to take money from friends and relative but it not easy. Money for short period from relative and friends is OK but not for long time, they also wants some return on their funds

Getting capital to start a business is one of the problem most people face. Which leave them with no option than getting a loan getting a loan is not entirely a bad idea the only downside is that it place too much pleasure and such individual normally a business takes time to grow, so getting a loan will affect a patience of the business, it will make the person to be in a hurry to pay back the loan which might have negative effect on the business. Getting a loan from a family or friend is kind of better than getting from the bank.

There are many people with good business ideas but financial constraint has been their major obstacle. Many of them would have become CEO, while many would have become great business owner but lack of capital has defeated the purpose in them. Since we all know that is always difficult for average citizens to gather enough fund to start a business, is it advisable for such a person to go and borrow a loan to start business.
Though I'm one of the advocate of don't take a loan to start a business, but in this case I feel the average man does not have a choice except he will just forget his business ambition and look for something else.
What do you suggest such a person to do in this case?

Well, in situations whereby there is no other option available for financing the business , one should consider going for loan .
However ,the person needs to borrow only when he is certain that the business is bound to progress , this of course can only be measured through a business feasibility plan.

Nevertheless , the risk associated with starting a business with borrowed money is very high . It prevents one from taking calculated risks that can lead to the success of the business .

Unless circumstances make it the last available option, borrowing money to start a business is not a good idea. It almost always never end well. But then again, it depends on the kind of business one intends to start and the plan one has in place to take care of the debt incured. Another thing to take into consideration is the will and intention of the borrower to pay back the money as soon as possible. Otherwise, it can lead to problems and in most cases, the shutdown of the business before it has attained its potential.

yeah when you do not have a captal for the business because starting a business must involved money there are people who borrow money not even from people but for companies that when paying they pay with interest soyou can start a business with a borrowed money.

marcusfe said:

There are many people with good business ideas but financial constraint has been their major obstacle. Many of them would have become CEO, while many would have become great business owner but lack of capital has defeated the purpose in them. Since we all know that is always difficult for average citizens to gather enough fund to start a business, is it advisable for such a person to go and borrow a loan to start business.
Though I'm one of the advocate of don't take a loan to start a business, but in this case I feel the average man does not have a choice except he will just forget his business ambition and look for something else.
What do you suggest such a person to do in this case?

Click to expand...

If he or she is very sure about the idea inside him,and what he or she want to establish is very sure for him,that within the period of time been giving to him by the lender he would get it back with profit..

I will advice he or she to take it,because I also need money or get a loan to execute some business idea in me presently but don't get where to get a loan from..

I tried to get a loan from my bank,but they are saying my account is not a salary account so because of that o can't get a loan from them until I get my account into salary account..

You could imagine the kind of country we are living into. The bank that I have been banking with more than ten years saying that to me there customer,it is a shame to our organization and our country at large..

Every citizen should have the chance or allow to get a loan to start up a business,I think they should put that into law in our country...

Avoid using a loan to start a business at all cost, it is always good to start a business with your money, the main reason for this is being the greater level of risk, experience and responsibility that you are assuming for yourself. Am not disputing the fact that loan can not work to start up a business.
A loan can be effective in a situation where you already set up the business and you need an urgent assignment to do with the money you can get a loan

In India borrowing money for starting business is very common. Here most of state have financial corpotations, who give loan to start Industry. Banks are also giving loan for working capital. I think it is not bad to take loan to start business. But one must have some their our funds. At least we must have 50% own funds.

starting a business with loan is not a bad idea but starting with bank loan is a risk one needs to be careful about.
1. What is the security on your present job
2. Can you cope with the interest rate from bank
3. No business yields proceeds immediately so are you sure the load wont be too much on your salary
4. Running cost: This is one vital part of business most people neglect. The money you pump into the business alone is at times more than your initial capital cos you keep pumping it in till the business stabilizes
5. Please don't trust on this company workers when it comes to haulage, there is a lot more homework to be done.
In all, please consider the loan carefully cos to collect money is sweet but pack back is never easy.