Loan for business, good or bad?

[U-Exchange]

A lot of business owners find it very difficult to raise big or small capital to start up their business. When This happens, most of them have no choice but to go for loan.

Getting a loan to start up a business, is it a good idea?

Well, getting a loan to start up a business is not a bad idea, the most important thing do is to find a profitable business.
If you get a loan to start up the big and profitable business, you will be able to settle the loan in due time.

 

[Setho]

There have been a lot of talk about if it is ideal for somebody to take a loan in order to start a business or it is better off if they are going to look for other means of getting money . The truth is that there is no particular way in which you can be able to go because there are a lot of things you will have to consider .

First of all the economic situations in a lot of country is bad and you can ordinarily not be able to approach the government for money to start a business or get a job in order to save and then start a business . If the business that you want to open is a large business and you require a lot of money then you are left with no option than to approach financial institutions and collect a loan.

There are also some countries that's taking a loan comes with some benefits with the financial institution like you are going to be granted free consulting as well as tax waiver for a particular number of years provided that the loan is used for the intention in which it was collected .

 

[Augusta]

in as much as I know that getting a loan to start a business might help one kickstart a business but I still thinks it is a bad idea especially when such comes with a high interest. Another is that starting a business with a loan is a dicey one because you are not sure of the business and its sustainability which means if the business fails to the loan will go with it and paying back the loan become an issue. This is one why reason why banks and other financial institutions don't like to give a startup business loan, they don't want a gamble with their money.

One that has not done a business before and isn't sure how the business will turn out should not get a loan
it is will good to make all the business and learn from it with personal or family money that you wouldn't need to pay back not with money you would need to pay both the capital and interest on it.

So personally I wouldn't advise anyone to receive any loan and start a business with it. Instead use the little money you have to start the business and grow it to a good level before looking for a loan

 

[Mika]

Getting a loan itself is a difficult process. You need collateral, your business needs to be registered and already functional, and you need to have an income source to convince the lender. You want to start a business, you walk to the bank, they give you a loan and you start a business, you make money, and they pay back the loan. Getting a loan is not as simple as this. You will have to do a lot of paper works, Even when you are eligible for the loan, the bank may not immediately release the entire funds. The bank will release the funds partially in order to see how you are using the money. If you have a legit business, and if you can fulfill the loan criteria, financing your business through loan money can be a good idea because you do not have to stop just because you do not have funds. However, the loan is not the only way to fund your business, there are numerous ways to fund your business, for instance, you can raise funds through crowdfundng. One of the major disadvantages of getting a business loan is you will have to start paying the loan (a fraction of the principle with interest) before your business earns money

 

[Abigael]

Starting a business can be so hard if you don't have the capital to be used for this. Personally, I prefer not to jump into taking loan in order to start the business. You could take sometime to save up the money or look for other sources like borrowing from friends and family.

When everything seems impossible and you end taking a loan to start the business, it is best that you plan the business really well. A loan requires you to pay back at a specific time. So you will go through so much pressure to run the business, earn profits and pay it back on time.

It is so much better when you are starting a business that you are so familiar with using the loan. It should also be a business that has high demand and so you are assured of earning profits and having to pay it back on time.

People also consider looking for another source of income to pay back the loan apart from the business. Maybe from an offline or online job. That way, you don't have to pressure yourself so much at the beginning of business. After all, it may take you sometime to start making tangible profits and so you are better off paying the loan from another source.

 

[Setho]

There can be so many ways in which taking a business loan can be able to go and in some instances it can be a good idea and sometimes it can be a bad idea . First of all the loan process is something that is very difficult in a lot of countries because you will have to have built a high positive credit score, willingness to create a business within that country and also you must have a high-value collateral and guarantor.

Alone can become a bad idea if the time frame for you to repay the loan and the interest as well as servicing is within a short time . The new businesses often need a lot of time for the business to become stable and for them to start getting profit before repaying the loans but that is not what is obtainable .

If you can be able to get a loan after you must have research enough about your business and know how to be able to kick-start it early enough, then that can be a very huge advantage for you .

The most important thing here is that in every loan you want to take you should ensure that it is going to benefit your business and you can be able to repair on time.

 

[Sotherefore]

If you can get a profitable business to start with the loan and you are very sure of getting back the money to pay the loan owner then I don't see anything wrong , at least that can really help you to have a business and still pay back the loan .

It's can be risky when people who are getting it do not have a way of paying it back . It will even be much more difficult if the business they are establishing is not progressing because of so many reasons , such as establishing it in a bad location or maybe by establishing a wrong business that is not generally profitable. All these things must be always be considered when getting a loan as this will help you avoid regret.

If I can be able to do a proper research concerning the business I am interested to start and I am 95% positive that the business will be successful , I can get a loan to start up the business only when I have an external way of paying back the money and not to pay it back again from the business I use the loan to start .

 

[CALVINDOL]

It is hundred percent acceptable and adviced for an individual to establish his business idea or implement his business and tension with the use of his or her own money as capital for the business establishment and implementation . But their intention to borrow money from business financial organisations for the purpose of establishing business is not acceptably allowed this is because the inability for you to pay the business loan back to the business organisation where it was borrowed could actually be a problem for you if your business that you established with the loan doesn't go as planned or expected .

If you have no other choice than to borrow money or borrow a loan from a bank to establish a business it is advised that you be the loan borrower should first of all ask yourself that's what is the business that you intend to establish with the loan doesn't go as planned or expected what other weeks do you have to repay the loan . If you are able to answer this question correctly and reasonably then you can go ahead to borrow the loan from the financial institution but if you can't it is advised not to even borrow the low at all so as not to bring unto yourself on called and unnecessary hardship and Truman .

 

[Sikapa]

I can never say going for a loan is a bad this but one this is that you don't have to start a new business with load. This is not advisable because if you are new in the system and you want to start something, it is good to save money before you can you that your money you saved to start your small business. After you see your business grow that you can go for loan to expand it.

When you are starting business, maybe you don't have money and you will still feed on your income so you can just imagine if the business is not running the way you thought it would. This means you will run lose and there if you go for loan then you might encounter problems. Many people don't know this and they will just start a business with loan from the scratch and the later they will found themselves in a hot water because the business couldn't stand. Expanding already booming business is a good discission to make because you can pay your dept without no time get your business and money back. This is how most business men and women does to save their business.

 

[Oluwasegun purpose]

Taking a loan to start up a business is a Very bad ideal because that loan in which you you take to start the business stand as your capital...instead of me taking a loan to start a business I will rather go out and look for money which is a form loan to start up the business that's I why you need to learn the habit of saving because if you have been saving it will not be difficult to start a business you Will not even think of taking a loan from any were even in this country presently it is a difficult thing to take a loan before you are going to be able to take that loan you mus look for a collateral who will stand for you to take the loan even if you are able to take that loan to start up the business,that business of yours Will going to end up in debt that business will not end well it will not be profitable and instead of the business bringing profit for you it will be bring losses for you so I will advice you no to take or used a loan money to start up a business

 

[Suba]

There is nothing bad about using loan capital as business capital, it would be better if the loan was less than 40% of the total capital needed. it means you already have 60% of capital. Using loan capital as business capital will be full of risks, if the business fails, you will still have to pay debts. Therefore, before making a loan, you need to evaluate business planning and control, you also need to make an estimate of sales, and income, the costs of the capital that you will use. and you also need to do market research, what about business competitors, or market share that you will prioritize.

 

[eldavis]

Personally I would never advice a beginner to startup a business for the very first time using loans as a means of capital. This is because besides the fact that they are still new to the business, they have not gotten a solid customer base, so there is no guarantee that they would make profit form the business. Does who usually take loans are does who have been grounded in the business already.

 

[Lens1000]

Business loan is not the best for those who are just starting up a business. It is very important to Note that taking loans for business is not advisable most especially for a startup. If you are just starting up a business there is every possibility that you would not profit in the first month because immediately you take the loan the Loan shark could be expecting payment immediately and this is actually what will not work in this regard. I so much prefer to use my capital for the business and it is far better than taking long for the business. Most of the loan sharks would not understand that your business is a new one and needs time to make profit before the start collecting payment. I am of the opinion that loans is not really advisable for a start-up business. You really wanted a loan, it shouldn't be the one with high interest rate. The best thing to do is not to take loan because it could be very detrimental and it will lead to the the crash of a business this is very bad for your new business. I'm of the opinion that it is better to use the capital that you have to start your business rather than taking a loan.

 

[Richee84]

Loan have it own merit and it own demerit depending on the angle at which we look at it and what we use the loan for. For a start-up business, financing a new business is not advisable at all, a new businessis usually have it own early challenge which include, regular funding of the business, struggling to survive in the new market etc, it will be even more difficult for a new business to repay back any money it borrow because of those challenges it bound to encounter at early stage. But loan for an existing business is good for there expansion. An existing business who have move from the infant stage to the growth, whose profit is steady because there tremendous increase in sale, the loan can be a medium to expand it business in other to give it competitive advantages over it competitors. An existing business with steady profit will have the resource on ground to pay back any loan he borrow cause the means of pay back is already available for them. If u must collect loan then let the loan be use judiciously for the purpose which is meant for and means for paying back is already on ground.

 

[soxcryp]

That will depend on whether the loan can be paid soon and if it is the same business that can achieve it. In general, if it will lead to a significant increase in productivity, you can consider doing it, but in my opinion, making a savings plan and financing yourself in this way, whenever possible, is much better.

 

[Kingsley]

This can be side ways it all depends strongly on who is accessing the loans and what the loans will be used for. I have seen somany people that approach us for loans and they all claim they are going to use I to run a business but in the end they utilize the funds for another urpose entirely and obviously they will most certainly find it difficult to pay back the loans and this will make them defaulters and abscond. Then again we naturally do not give loans to starters because we believe many of them lack the experience on how to really manage finance as they are still very fresh in the business.

So overally speaking loan in itself is not a bad thing to access but what really brings about problems when it comes to loans in general are how we administrate the loans that we access. I can only encourage a potential business man or woman to access loans after only I have ascertained that the person has acquired a practical experience as to how he or she will run the business and make profit, otherwise I will never encourage anyone to obtain loans mostly as a starter.