Alternative against taking business loan

[Kingsley]

If you are keen to start a business but have no starting capital, then there are some alternative options rather than taking out a business loan.
Firstly, have you considered starting off with a business that doesn't require much capital that you could perhaps self fund, This will allow you to earn some money and then invest your earnings into the larger idea. Always my preferred option!
Secondly, think about taking on a business partner. There will be people out there who want to partner into a business but don’t have experience in business, but do have capital. Discuss an equal partnership. You can often find these people on message boards and forums. They will probably even bring their own set of skills to the table!
Lastly, if you are adamant on taking out a business loan, then consider purchasing an established business.
There are many sites where people list established businesses for sale, and if you can find one in the area you’re looking to work in, then this may be an option for you, because with an established business, you will be able to ask for accounts and be sure that the loan repayments would be covered before taking out the loan.

 

[arunima25]

These are good alternatives if one wants to avoid taking loans for whatever concern.
One can take decisions based on the amount of fund they have and their idea of business. A small business can be self funded from the personal savings and once it is established, one can expand it. Having a business partner might not always be a prefered choice. It might turn out to be beneficial but then can also turn everything into a sour experience if the partners get some rift. If one is opting to have a partner, a good legal documentation of the rules and regulations along with other specifications like profit sharing etc should be mentioned and legalised. It's better to keep things sorted out from the beginning.

 

[Segat]

Taking loan to start a business is not a must and not even advisable but however it is most necessary, the following must be given consideration;
*the business must be the one you have been into before.

• or that you have the technical know how.
• the loan must be to cater for the business and for it alone.
• the business can be test run to certify the feasibility of the particular business in that particular area to avoid loosing much even it does not work out well.

 

[arunima25]

Sometimes getting an approval for loan can also be challenging. One needs to fulfill certain criterias depending on the country and regulations there to apply for a loan and to get it approved. Also, one needs to keep in mind many factors before taking a loan...the interest rate, duration and EMI, affordability. Not being able to pay the loan back in time can lead to many legal consequences.

 

[Alexandoy]

I agree with the title to avoid getting a loan for starting a business. My suggestion is to check your assets and evaluate which asset you can sell to have the funds for the capital of the business. If you have 2 cars then maybe you can sell one which can provide you with the needed capital. Some other assets that can fetch a good price are jewelry and antique furniture.

 

[Abigael]

I totally agree with the points you have made here. I also take point number one to be my best option. It is always best to start small with a business that you can self fund. That way, you start saving early from your income online or offline. Taking on a partner is a good option too, but you should be careful about who you choose to partner with.