Sotherefore
VIP Contributor
Entrepreneurs who are not able to secured the required capital they needs in starting up a business might consider a loan as the best option. Well there are some advantage of getting a loan to start up a business and also at the same time there are some risks associated with loans most especially for new business start-up. These disadvantages of loans might overwhelmed the advantage that is associated with loans for business , which are as follows
* The first reason why loans may not be suitable for new startup business is the fact that paying back this loan will definitely draines your business : Here a specific period of time will be given for this loan to be paid back. Sometimes this period may not be enough to generate the needed profit to runs the business affectively. Trying to pays back the loan when you haven't generated enough profit means that you are likely to pays back the loan with the same capital you collected which might brings down a business.
* The general risks of business failure: A business you haven't start up before might be at risk of failure since you may not have a background experience of how the business really works. It may be more dangerous if proper arrangement was not done to aids the progress of the business . If failures sets in you could be at risk of being arrested or your collateral being forfeited if you are not able to pays back the loans due to unexpected business failure.
* The general stress associated with loans ; Securing a loan to start up a business comes with stress. You won't likely relaxed as you would also be careful to make sure you don't makes mistake that could possibly leads to business disasters. The overthinking, the fear and other negative emotions is not the best to the overall health of an entrepreneur.
Base on this point, I suggest raising the business's capital through hard works is the best options.
What other possible disadvantage do you think is associated with loans ? Feel free to discuss belows.
* The first reason why loans may not be suitable for new startup business is the fact that paying back this loan will definitely draines your business : Here a specific period of time will be given for this loan to be paid back. Sometimes this period may not be enough to generate the needed profit to runs the business affectively. Trying to pays back the loan when you haven't generated enough profit means that you are likely to pays back the loan with the same capital you collected which might brings down a business.
* The general risks of business failure: A business you haven't start up before might be at risk of failure since you may not have a background experience of how the business really works. It may be more dangerous if proper arrangement was not done to aids the progress of the business . If failures sets in you could be at risk of being arrested or your collateral being forfeited if you are not able to pays back the loans due to unexpected business failure.
* The general stress associated with loans ; Securing a loan to start up a business comes with stress. You won't likely relaxed as you would also be careful to make sure you don't makes mistake that could possibly leads to business disasters. The overthinking, the fear and other negative emotions is not the best to the overall health of an entrepreneur.
Base on this point, I suggest raising the business's capital through hard works is the best options.
What other possible disadvantage do you think is associated with loans ? Feel free to discuss belows.