Should you borrow for your Business ?

[raaman]

Should you borrow for your business ?
You need not take a loan for your business to the extent it is going to be in the future years. Alternatively, you can get a reasonable loan that you can repay immediately while just starting out.
Do not hope to see costs covered by profits shortly. More often, people overestimate the success of their business in the first few months and years of operation. Building customer base takes time and it usually takes new businesses a year or more to become profitable.
Avoid making bad decisions. Startups face many things. If the location is wrong, product choice is wrong or the competition is underestimated then your business may not perform as you expect.

 

[moonchild]

I think it's totally fine to borrow from your business if you have other sources of paying it back, else it's not a good idea because you'll end up eating up the profits garnered by the business which will gradually starting eating up the capital too.

You're better off taking a loan from a bank and funding your expense or from family and friends, I've seen a lot of businesses crumble because the owners are basically using the profits to fund their lifestyles and with time they start using the capital which isn't sustainable and later have to close the business.

 

[saoussen5765]

You're better off taking a loan from a bank and funding your expense or from family and friends, I've seen a lot of businesses crumble because the owners are basically using the profits to fund their lifestyles and with time they start using the capital which isn't sustainable and later have to close the business.

Bank places too many requirements to accord you a bank loan which is not the case for family and friends but they could have higher interest from getting an accord from a bank loan which is the difference between them.