Am thinking of getting a loan

Peterlight

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

Verified 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

Valued Contributor
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

Active 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

Valued Contributor
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.
 

btaliat

VIP Contributor
Have you asked your mom the reasons why she is against the obtaining of loans? Does she have another alternative way to help you secured fund for your intending business? It no, you may consider this before you go for your loan..

Having feasibility study that's solid is not the yard stick to go for loan. There are unforseen factors that can ruin the workability of a good feasibility study. For instance, pandemic can be one. But if there is some measures against this, then loan can be considered.

The conviniency of loan should be considered. There is need to the term and conditions on which the repayment of loan should be made. If the repayment favors you, then there can be consideration on obtaining loan. At least the interest should be one digit figure and the time of repayment should span a year at least.

There should be alternative of how to repay the loan. There are most time when the plans and the business we obtain loan for may not work out, then there should be another way of repaying the loan before it becomes dent and heavy debt on us.
 

Kendy

Verified member
Well, if your acquaintance has advised you not to take a loan yet you are persistent about it, I do not think the advise here can make you change your mind, this is because the mind is a very powerful tool. Taking loans to set up a new business is not always recommended and this is more because of the likelihood of pressure to strike a balance between repaying the loan and making profits evenly. If you have a feasible business idea and you have carried out or conducted the market research and feasibility study, then you can take the loan but be sure and ready to match up with the task of facing the challenges. Taking loans is not completely a bad idea because there are some entrepreneurs who took loans and they are excelling in their business venture. The most important thing is to be dedicated to your investment, bring in creativity and innovation which can make your business stand out and compete in the market. You should also have a crisis management technique and a concrete backup option just incase an unforseen circumstances just like the covid-19 pandemic happens again, so that you do not find yourself in a state of anguish and dilemma.
 

Rachael

Verified member
Taking a loan is not completely frowned at or out of options but there are other means of raising capital that does not require loans. It is important to always source for other creative ways of raising capital and not every time we just jump at the opportunities of loans without even considering the after effects. So many businesses are in bad debts because of taking loan. When you do not have the right source or channel of repaying the loan if your plan does not go as expected, what will you do? This leaves a lot of people in a devastating place of depression and pressure. Personally, I try to avoid the urge to loan money no matter how pressing the need might be so long as it does not have to do with life and death. It is better for any business person or an individual to bring up creative means of raising money. In fact, when once you are skilled or talented, there are ways you can raise capital within split if seconds without having to bother on repayment and you would not be under duress. Lack of skills and creativity is one reason people majorly take loans.
 

Sotherefore

VIP Contributor
Well we don't really know what you want because at the end of the day every decision will still boils down to what is in your mind .

what I can say is that you can go ahead to get a loan to start up anything you are interested to do , but the most important thing is that you have to really understand the potential risks that involved in getting millions of naira as a loan in starting a business. It should only be done with the type of Business you are hundred percent sure will be successful . I do not see anything wrong with that but if you're not sure about the progress of your business it is rather a wise decision for you to consider another alternative.

A lot of people do get loans to start up whatever business they are interested to do and they are succeeding, and also at the same time a lot of people are also I interested to get a loan but they do not have the opportunity. At the same time most people can get this loan to start up the type of business they are interested but sometimes the business is not always successful.
 

Skysaint

Verified member
Wow, you already said a thing about not changing your mind but am happy you are willing to listen to other members reviews. Taking a loan isn't actually the best for business and I know you're already aware of that and the interest rate, although you didn't say it by percentage but from the tone of your write up, it seems they are just unbearable
Well, I can advise you to go for the loan and I can also advise you not to go for it depending on what business you're going into that worth millions and how feasible you think it is at yielding you profits. Again, I will also want to remind you that what many see in a business, I mean in reality, is always different from what they had imagined; their original plan.
You said you wanted to take a loan of just a million naria and so I want to ask you if you can't possibly earn that amount from the capital you already posses. If you can't then you can opt for a loan but be sure you're about 95% sure that you have I'll make repayments whether or not the business succeeds. If that's not the case then I would advise you find another business idea to establish.
 
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