3 tops reasons to avoid starting a business with a loan

[Cinderella]

We can start small. That's what I believe in and practicing. As much as possible, I want to save the amount I needed for the business I am planning to have. Though I am not setting aside the idea that availing a loan can help but we must not rely everything on it especially if we don't have other sources of income that we can get the amount we needed for the repayment of the loan.

 

[Augusta]

Taking a loan to start a business has its own disadvantages, but it surely works sometimes. One of the biggest disadvantages that I know of is that pressure you feel when you have to pay back a loan. It may cause so much anxiety that it becomes hard in concentrating in running the business, hence it fails and you remain with the loan burden.

That is the problem, the pressure to pay back which leads one to failing in the business. It isn’t totally wrong to start a business with a loan but the truth is that it isn’t just a good idea. If there is a way of borrowing or getting support from elsewhere it will be a lot better

 

[Abigael]

Taking a loan to start a business has its own disadvantages, but it surely works sometimes. One of the biggest disadvantages that I know of is that pressure you feel when you have to pay back a loan. It may cause so much anxiety that it becomes hard in concentrating in running the business, hence it fails and you remain with the loan burden.

 

[Richee84]

Starting a business with a loan is a risk not worth taking due some of the factors stated above. A new business is at the early stage and the chance if it survive in the market is still not certain. So while the business is still trying to survive and gain market share then the burden of loan repayment is still on ground, the business might not likely survive as money that should have been use to develop it will be use for loan repayment.

 

[funmi]

It is a very bad idea to start a business on loan. Starting a business with loan money is very stressful and risky. Paying back the money for a business that is just getting it foot up is very stressful. What if the business didn't go the way you proposed it? What will you do about it? I will never advice anyone to start a business with loan money.

 

[Chibson]

This is a topic I have been trying to discuss and also treat. A lot of people go into loans in order to start a business and on the long run the business herald hopefully and of course they go into bad debts. I would never advise anyone who is just starting a business to eat or borrow money in order to start it. It is better an established business man takes loan than someone who is just starting.

 

[Augusta]

Point #1 is very important because your can be spending so much for the interest if you do not make proper computations. When I had my business and I was borrowing money due to the sudden progress I realized later on that I was paying so much for the interest of the lenders. It is like my profit goes to them and nothing was left to my business.

That is the whole idea of high interest, the lender want to also be part of your interest gained. So they come with high interest which to me makes no economic sense since you might just be doing all the struggles just to pay the lenders all the interest. It just not it

 

[Alexandoy]

Point #1 is very important because your can be spending so much for the interest if you do not make proper computations. When I had my business and I was borrowing money due to the sudden progress I realized later on that I was paying so much for the interest of the lenders. It is like my profit goes to them and nothing was left to my business.

 

[Augusta]

Definitely, rely solely on a loan to get a business to where we want it to be might be a very risky strategy. Unless the loan is a long term one which in most cases isn’t. so relying more on savings and money gotten from friends will be a lot

 

[Augusta]

Starting a business needs money but it will be a bad idea to start yours with a loan. Taking a loan to start a business will be a big risk. It is always better to start a business without unnecessary financial stress which starting with a loan will bring.

The following are the top 3 reasons to avoid starting your business with a loan:

High interest from lenders

Loans must time comes will high interest that will gulp a lot financially from you

Short repayment time

Some loans come with very short repayment time like about 6-12 months; by this time you are still unable to stabilize your business

Failure of the business

Loans can fold up your business, because you are yet to begin the business, you are already expected to pay a quarter of the money back. Then the whole idea of getting the loan has been defeated

What your thought on this?

 

[Mika]

There is no need to be afraid of loan. If you are afraid of taking loan for your business, this indicates that you are not confident enough about the business you are going to start. If you are not confident with the business, you should stop immediately and start doing more research and building resources for your business.

 

[Augusta]

If you are starting up a business, it will normally not yield profit at least for the first two months. You must plan towards that mostly if it's a fresh idea and not some sort of business that has existed before.
Starting up such business will be a grave mistake because it won't survive . I am writing from experience. It happened to me about 5 years ago when I started a POS business then the business was still fresh and not common as it were now.

I like this because experience has always been the best teacher.i have seen this happen to people I know and I know it never the best most especially with a new business that the profit doesn't come I'mmediately but you still have to make the loan repayment. For me it a stressful venture. Getting money from friends and family will be a lot better.

 

[Sammyesx]

I believe anyone getting a loan to start a business is very confident of the success knowing fully well that the term is often in favour of the lender but not withstanding, anyone getting a loan with the aim of starting a business should negotiate a better term, especially the payback time.

 

[Lens1000]

If you are starting up a business, it will normally not yield profit at least for the first two months. You must plan towards that mostly if it's a fresh idea and not some sort of business that has existed before.
Starting up such business will be a grave mistake because it won't survive . I am writing from experience. It happened to me about 5 years ago when I started a POS business then the business was still fresh and not common as it were now.

 

[Augusta]

I am also of the belief that one should not start a business with loan. I do not understand why there are still people promoting this kind of idea, it could be based on different countries though. But when it comes to a country like mine where things don't work out always for business owners, it's not easy.

Yeah same here with my country it will really be a risky venture starting a. Business with loan because lenders are not smiling at all with their interest rate. If one needs to expand yeah I will encourage that buy just starting out and starting with a loan one will need to really put efforts to get it right

 

[Bookwormlux]

I am also of the belief that one should not start a business with loan. I do not understand why there are still people promoting this kind of idea, it could be based on different countries though. But when it comes to a country like mine where things don't work out always for business owners, it's not easy.

 

[Deleted member 28127]

The main reason of people get loan to start a business that they get enough experience from work and working for a monthly salary will be risky as anytime the employer can say to you he is no longer able to pay you a salary or may find someone more competant than you then that let employee get a loan to start his own business because he want to be not limited to a monthly salary. So it is not possible. I know many people wants to avoid risk of starting own project.

 

[Mika]

I don't think you should be afraid of taking a business loan. If you do not have any funds for investment, if you do not want partners for your business, or if you don't find any partners or investors, a business loan comes in handy. If you have a great business idea and if you can put u a good team, you will surely become successful.

 

[btaliat]

In as much I don't really support obtaining loan in a way to start a business, I don't really object to the fact that there may be sometimes when we are left with no option other than to obtain loan to kickstart our business lest the idea fade away on our minds.

But in order to avoid the trouble that does come with loan, one needs to take the bull by the horns and never to start any business using loan. There are other several ways these can be done.

Loan is not the only source of income for business. In fact, there are other ways like borrowing from families and friends if one doesn't have a personal saving. These methods can be used in order to make sure that we don't out ourselves in the trouble that may later ensue from obtaining loans.

In case there is no people to borrow from, then we can decide to start with what we have first. After some times, then we can decide to expand by the gain and not through loan. There are many people that have used this method and it is working for them.


In advance countries, some even go as far as using crowdfunding. In this method, they solicit for help from people .

 

[eldavis]

Starting a business with loan is just too risky for me, and I would not even advice anyone to take a loan. I have seen cases where people took loan to startup their business and in the end the business did not go well, they had to look for ways to pay back. Some even sold lots of their properties just to pay back the loan they took.