Business Ideas What do you think stops a business from repaying a loan

[Wisdom01]

Many business that have taken loan in the past and were unable to payback face lot of liquidation ,and why some the owner was arrested and the business and some of his propererties were taken away and most times certain policies could affect them like government policies ,while most are been caused by the owner themselves like for instance finance mismanagement and more expenses ,inadequate spendings etc,many business have struggled in the past because of the loan borrowing and repayment issues ,there was a time a business owner who couldnt repay a loan that was borrowed and his properties were taken with his business ,the loan he borrowed was used to pay for his hospital bills when he was on treatment ,so what do you think stop business from repaying loan

 

[Deleted member 28127]

The business stops paying the loan not because it is not successfull business but due to pandemic if for example I take a loan to open a coffee or restaurant or place to sell clothes then pandemic are obliging you for example to accept less clients and some days when there is many infections by Covid 19 then the owner of business will not find money he has not a money generator at house to pay back loan gotten to start his business then the owner will be arrested and in reality it is not his fault.

 

[Wisdom01]

Even before the pandemic some business still find it hard to repay the loans they have borrowed ,because they just dont have proper financial management of borrowing loan ,when they borrow loans they focus more on expenses and spending lavishly instead of making the business grow up to a large scale to be able to get more customers that will demand the business product at the end of the day

The business stops paying the loan not because it is not successfull business but due to pandemic if for example I take a loan to open a coffee or restaurant or place to sell clothes then pandemic are obliging you for example to accept less clients and some days when there is many infections by Covid 19 then the owner of business will not find money he has not a money generator at house to pay back loan gotten to start his business then the owner will be arrested and in reality it is not his fault.

The business stops paying the loan not because it is not successfull business but due to pandemic if for example I take a loan to open a coffee or restaurant or place to sell clothes then pandemic are obliging you for example to accept less clients and some days when there is many infections by Covid 19 then the owner of business will not find money he has not a money generator at house to pay back loan gotten to start his business then the owner will be arrested and in reality it is not his fault.

 

[funmi]

One thing I know that can make a business to be unable to repay a loan is when the loan money was not judiciously used for the business. Another factor is that When the business is not really stable and bringing enough out put can lead to not being able to repay the loan given. Some people might not even use their loan for the business they said they wanted to use it for initially.

 

[Good-Guy]

In simple terms, a business might not be able to repay loans due to the fact that it did not generate enough revenue to repay the loans. This might be because of several reasons. It might be possible that the company or business did not effective made sales or the business strategy was not good enough. In fact, the business idea itself might not be good enough or the businessman who took the loan was not experienced enough.

 

[Sherman198]

What can stop a business from paying up a loan depends on so many circumstances. I think some businesses are not making enough to pay up a loan. Sometimes a wrong chose of business can cause that.

When a borrower chosed a wrong business to invest a loan on, and maybe the business stops yielding profits, I think it will become difficult to pay back.

 

[Lens1000]

There are so many things that could cause a repayment deficiency. majorly, when the business is not making profit as expected. Loan repayments becomes very difficult when the business you invested on is not doing well. It could also be due to poor management. When the staffs that you employed do not share your dream , when you are on different page with your partners, the business will go wrong.

 

[Augusta]

A lot of issues crop up doing the course of the business making the borrower unable to pay back his or her loan. The outstanding one is the mismanagement of the funds. There is no way a magic can be done when there’s a misappropriation of funds paying back with be difficult

 

[Chibson]

That is the reason why I don't always advise people who are just mentioning into businesses to take loans because it may be dangerous in a situation whereby the business is not successful as it was projected to be. I have seen a lot of people who have gone through this and that is the reason why I'm always advising people to start small instead of making loans to start business.

 

[sincerem]

Your last sentence you made on your thread is one of them. If we stop using our business profits or funds for paying the bills all the time. Uncertainty most times cause our business to collapse, that's why we don't pray for that, especially health break down just as the business owner you outlined suffered.

 

[Alexandoy]

When you apply for a loan the focus should be on the repayment and not on the need. The fact that you applied means the need for the money is there. Usually the borrower would forget the issue of repayment and would say "will cross the bridge when I get there." But usually the loan is not paid properly that penalties are charged and there is the risk of the collateral being forfeited.