Am thinking of getting a loan

Peterlight

Active member
I have a business Idea but I lack finances to start with, the business is more like a multi business but it requires a lot of millions.

I have thought of it and I have gone out to survey the locations in which I will establish the business.

My mum says, I shouldn't get a loan but I don't want to listen to her cos I have made up my mind. I already put in for a loan worth a million but the interest rate on it, is really massive and it's just like borrowing money and paying back the loan till you die.

I don't want to bore you with much details all I want to know is if I should go for the loan or borrow from friends and family, cos if am to borrow from any of my family or friends, they might not give me the amount I need.

Please should I go for it or do you guys have an alternative.

Thank you.
 

Josemendez

Well-known member
First of , I would ask you the following questions. Have you made analysis of the feasibility of the business , and determine how successful the business will be ? , I asked this because , if the business feasibility plan shows that the business can yield something fast , then you may consider getting the loan , although I wonder what type of bank will give a loan condition that will require one to pay heavily for it.

Secondly , do you have a relative or family member that can give you the loan with lesser interest rate ? If yes , consider borrowing from him than from the bank.

In conclusion , if you are really certain that the business will surely grow , then you shouldn't be bordered much , you should go ahead and get the loan .
 

Bookwormlux

Well-known member
Taking a loan requires you to ask your self a lot of questions and to evaluate so many factors. It is very easy to take a loan than to pay back when it is time. What do you intend to do with the money, how sure are you that the business would give you enough profits to repay the loan together with the interest without going bankrupt?

You talked about your intentions of starting a business and it is really disastrous to start a business with loaned money.
I always advise that you should start with the little capital at your disposal, then you expand the business as time goes on. It won't be easy bearing any losses with a loaned money.
Since your mother is against it, seek help from her. She may have some money to give you to start the business.
 

Jonaville

Well-known member
From what you said so far, I can deduce that there are more to loans than you think. It is very hard to pay back loans especially those with high interests. You will be literally drained and won't have money for other things. And have you even considered the collateral requirements? What will you need to provide as collateral? I will advise you to source for other options, like borrowing interest free from Family or friends. But if these don't work out, you might have to resort to taking a loan. But know that it won't be easy repaying it.
 

Abigael

Well-known member
Taking a loan to start a business is not that bad if you have a good plan on how you will start and run the business. You should also have a clear plan on how you will pay back the loan. But in your situation, it seems that the loan will be more of a liability than an asset. The interest rate being too high can make it so hard for you to pay it back. Moreover, your business will not break even that easily with profits being used to pay back the loans. So you should let go of that business idea or look for an alternative source of capital.
 
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