Is it advisable to begin a business with loaned capital

[Carpon]

I would like to hear your opinion on this topic. Is it advisable that I don't have money to begin a business and I decide to go get a loan to use as capital?
I have never collected any loans before but there is a cool business I see potential in and I do not have the funds to use as capital and that was when the idea of collecting a loan came to my mind.
Now my fears are what if the loan comes and drains me when I'm to pay it or the business does not work out and then I still got to pay the loaned cash back.
So taking all these possible risks into consideration and many others that there be what will be your advise to me? Should I go ahead and get the loan or I should source another way to get my capital? Share your opinion.

 

[eldavis]

When it comes to taking loans for a business startup, in the end the decision would be yours to make but personally I would not advice anyone to startup a business idea with the use of loan. Like you said starting a business with loan is risky. There have been cases where persons took loan to start up some business idea they assumed had potential only to get the opposite result later on. And there are cases where things go as planned. If there is a way to start small without taking loans, I would advice you start small and grow from there. Learn how the business works but if there is no way to start small, please be sure about the business before going on and make sure you have all the knowledge needed.

 

[saoussen5765]

In the current moment if you are just an employee it is impossible to start a business due to the high expenses before starting such a business and also the price of rental and equipements are extremelly high and even with some loans you cannot reach all this money especially if you are married.

 

[Suba]

Starting up your business with loan capital does have a high risk, especially your psychological factor, you don't concentrate on running a business, but how do you pay off debt. Unfortunately I don't understand what type of business you will run, such as barbershop, car wash, retail store etc. If you already know well what your business goals are, then you will be able to determine the minimum capital needed. Loan capital must have a clear time, both debt installments, the use of capital must be fast and directed according to purpose. So before you use borrowed capital to run a business, you need careful consideration and calculations. So you can determine how much capital to borrow. So I think it's okay for you to use loan capital to run your business as long as you have considered at least the factors I mentioned above.

 

[Ithedicious]

Well it may not really be a nice idea for you to just start up a new business with a loan . It indicates that you have a very poor plans for your business which is not the best option. In fact that alone can increase the possibility of you having a business failure and is one of the things we have to guide our self from doing.

If we do not have enough money needed to start up a business then we have to suspend our business until we have enough money to do so . This will save us from the stress of having to go through difficulties while trying to maintain a business and at the same time paying back the loan..

There are some instances that people can start up a business with a loan but in such a situation proper planning and arrangement has been done.

 

[Lens1000]

Starting a business with the loan are factors that wil affect the business negatively and not really good for someone to undertake because if you are getting a loan to start a business, especially if the business is a new one , it will cripple the business at the long-run and this makes it not advisable to start a business with taking loan from the bank or from the loan merchant because at last there is every possibility that you won't start to make profit and you will want to keep servicing the loan. It is definitely going to affect your loan repayment and it will land you into a big trouble. You could take loan for a business that is already stablished because it will be much more easier for you to repay but for a new business, it is definitely going to be very difficult. it has happened to me in one of my offline businesses . It really affected it negatively because in the process of paying back the loan it ended up eating up all my capital because I wasn't making profit at the start of the business . This is a very big lesson for me and I will never advice anyone to start a business with a loan.

 

[Augusta]

I am one person that don't advise anyone to start a business eith a loan because of the high interest rate and maybe the repayment period which is most times is short. But aside that you can start a business with a loan but you should be sure that you can handle the issues that comes with starting the business with a loan.

But if you would not be able then you should avoid starting your business with a loan because you might just fail in it and lose all the money. What you would be faced with will be more frustrating than when you even started the business.

You wouldn't even think about doing the business no more, you would he thinking how you would be able to pay back your loans. You see your dreams will be shifted from starting a business and succeeding at it to how you can pay back a loan.

 

[Abigael]

Taking a loan to start a business comes with it's own advantages and disadvantages. So you have to really weigh the two before deciding on whether it is right to take a loan or not.

The advantages of taking loan for business only come if you are really certain that the business you are starting will be profitable. And that certainty happens if you have studied the business well and you have prepared for any emergencies that may occur. The advantages include;

1. You get financial help when you need it and you have a chance of building a lifetime of profits from borrowed money.
2. You get to start small since the loan may limit you financially. But starting small also means you are under low pressure and so you have a chance of growing.

Some disadvantages include;

1. You feel pressure and anxiety due to the unpaid loan.
2. You may not have enough time to pay back the loan.
3. The business may fail hence you get into debt.

 

[Rubz]

I don't know if it's because i personally hate borrowing or taking loans that i wouldn't advise anyone to take loans especially from banks or other loan companies. I believe that if all at one is to take loans, them it should be from. friends and family members who one can easily explain to and plead with if the business doesn't go well as planned. One's own money is the best capital one can use to start up his or her business. There are different ways to raise capital; one could try working on get paid to platforms, online tutoring, working for a company, drop shipping, affiliate marketing, web designing, graphic designing and many others. I believe these are all better alternatives than taking loans.

 

[Sotherefore]

It is risky in the sense that the business might collapse , I'm not trying to duel on the negative , but all these things are what we have to put into consideration. There are certain conditions that could make people get a loan to start up whatever business they have in mind..

One of the reasons why loans sometimes could be encourage is only when you have had a capital and you are not able to access that capital within the period if you are interested to start up a business , the capital could have been on fixed deposit or on investment .

With all these ways , at least you could get a loan with the hope that you will pay back when the money meant for the business is ready . For me that is the only condition that will be needed for me to start a business with a loan.