Should I borrow a Loan From a Bank to Start My Business

[Makah]

There has been a lot of people asking questions like this and I am creating this thread to enlighten people about it.
In my own limited understanding I don't think and I would never advice any body to borrow a loan from bank or any financial institution and all those Loan app to start a flourishing business
I will advice anybody to Hussle and work for a while to gather up some money to start a new business
A friend of mine applied for a loan from a loan app and he was given a stipulated time to pay back but unfortunately he was unable to pay back now his Bvn has been blacklisted now he can't perform any transaction on any of his bank account because he was unable to pay back his loan with the six months he was given so I will never advise anyone to applied for a loan any where
Thank you

 

[Kendy]

Taking loans is not completely out of place but before obtaining loans, you should always try to have a feasible business plan and always check other available alternatives before deciding to take loans and it is more advisable and secured to obtain loans from bank rather than through online loan apps where your details are at risk to third party. If you don not have a means of repayment or collateral which worths the loan or a good credit history, it will be difficult to obtain loans from traditional banks. It is more advisable that you have a crisis management technique where you can easily repay the loan which is free from pressure. Considering during the Corona virus pandemic, people who got loan prior to the time were unable to recover the loan not to talk of making profits because of the imposition of the total or partial lockdown to curb the common speed or spread of the virus. This went all out as an eye-opener to teach upcoming entrepreneurs that sourcing for loans is not always the best way to set up a business as the disadvantages would always supersede the merits or advantages. At times, it is even more profitable to start with the little savings that you have at hand.

 

[sincerem]

The condition that accompanies acquisition of loans from a bank varies with different banking institution, but an individual that want to acquire such loans should first visit the customer care service provided by the bank to get proper information about the nature, terms and conditions that the individual needs to fulfill before they are qualified for the loans.

The loan system is often attached with interest rate and some of those rate may not be favorable to the customer so it quite appropriate to confirm all this information before acquiring the loans.
Furthermore bank loans are still favorable and could serve a really great purpose for the individual who could use such loans for investment and their personal businesses or to solve really pressing problems. I have heard of banking institution that give low interest loans that is pocket friendly to the intending customer that wishes to acquire such loans. I wouldn't discourage anyone from taking loans from bank and any other institution but endeavor to make a good research and make proper enquires before signing the loan agreement.
Many people have really benefited from bank loans and some also didn't have a good experience when they acquired loans from banks.

 

[Chibson]

I don't always advise people to take loans in order to start businesses because a lot of things could go wrong especially when you are not an established businessman. For sure, it is not bad for someone who has been in business for a very long time and have an established business for the person to take a loan in order to expand but when it comes to someone who is a newbie in business, it is not really advisable for such people to take loans. The reason being that you can take a loan and not be able to pay back. Another thing is that there will be a lot of pressure on you by the loan company or institution for you to pay back and that will not give you the rest of mind to think straight in order to run the business effectively. These are some of the emotional reasons it is very important for people to start businesses with their personal savings or donation from friends or family as the case may be. It is important to your start saving in order to start a business instead of trying to take a loan from bank because you may not be able to pay back.

 

[kayode10]

It is not easy to secure a loan from the financial institution especially Banks if you are just starting out as an entrepreneur.

The majority of the financial institution over here usually request for higher collateral before you can secure a loan from them.

Also you must be ready to bribe top officials before you can secure a loan. Beside that you are going to allocate a portion of the loan usually 15% for them. You will have to pay at least 25% interest rate per annum on the loan you obtained from the bank.

This is the reason why I always advise people to look for other ways of raising capital for their business idea.

You can simply look for a partner that we found your business idea and you are going to make agreement on how you are going to share profit.

Another way is to raise capital from here immediate family members and friends. You can teach your business idea to them and ask them for fund.

Make sure you promise them a return on their investment so as to motivate them and you must keep your promise if you eventually get the money from them. You can also raise capital from Angel investors.

 

[Jasz]

Loan is not totally bad, but there are saver alternatives. While taking loan it is normal to be scared at first , as fear is part of us, we only learn to control it so it doesn't cloud our judgement. But if you don't really know if the loan you are about take is worth it, this is totally dangerous except you mean to say , you don't know if you should acquire the loan.

If you don't have tangible reasons for taking the loan or if you think what you are about to use it for is not worth it, it is better you disembark. This is very risky as you might end up misusing the loan taken and end up putting yourself and family in trouble , thereby being so pathetic and sorry for yourself, you might end up losing all your assets too.

I will like you to ask yourself these questions carefully and as many times as possible. If you don't get reasonable answer after then, forget aboutttaking a loan.
1. Do you need a loan?
2 if yes what for?
3. Is it profitable?
4.is it feasible?
5. Can you keep up?
6. Do you still need a loan?


Quote Reply Comment
Report •••

 

[TOZZIBLINKZ]

I do not see it anyway why someone would think that it is better for me to borrow money from the bank in order to establish his or her business idea , or to implement a particular business idea that he or she have been dreaming about to establish or implement . Borrow a loan from the bank to establish a business is absolutely called a risk because it was absolutely a possibility that you could not meet up to the borrowed money when the time for a payment is dued . Even if you have to borrow a money possibly because you don't have any other choice to run to you must make sure that you have another alternative to pay off your debt possibly if the business idea you intend to establish with borrowed loan does not turn out to be as planned or expected .

In the absence of no alternative ways to pay off your debt it is advised not to even think of borrowing a loan from the bank so as not to put yourself into unnecessary and uncalled frustration and devastation . But if you have an alternative to pay off your debt even if the business idea intend to establish with the business plan does not go out as planned then you can go ahead to borrow a loan from the bank to establish a business .

 

[Good-Guy]

I would never encourage people to get loans and there are so many reasons behind that. First of all, when it comes to borrowing money, people usually mortgage something valuable. This means that you are risking something valuable and you risk losing your asset when it comes to borrowing loan. So until or unless you can afford to lose your mortgage, you must not consider borrowing money at all. Apart from that, one of the biggest problems involved with borrowing money is the fact that you need to pay interest and I am extremely against interest.

You will need to pay interest and when it comes to borrowing loans, banks usually charge a huge amount of interest money. I would prefer selling my asset and then start business rather than risking my asset and I would obviously avoid interest. The other problem with getting a loan is that the fact that it is not that easy to apply for a loan. you must have your paperwork ready and you must know what are the requirements of the bank when it comes to applying for the loan. These are some of the main reasons why I would never want to borrow money at all or apply for a loan.

 

[Sotherefore]

This is what so many people are always trying to be against because so many people just consider borrowing of money to start up a business as something that should not be considered for any reason except it is absolutely necessary because in most cases it could result in serious problem.

If we are to consider the disadvantage of not succeeding in the business compared to the ability to avoid getting this loan , we can jump into conclusion that not getting a loan is actually the best way if we are to compare it to the risk factors associated with this decision.

Personally I may not likely get a loan to start up anything in the future and I don't really know what condition that could really makes me to do so because I don't even have it in my life plan to get a loan to start up anything because of the risks associated with it.

When thinking of getting a loan to do anything, what has been running through my mind is that what if I get this loan now to start up this business then at the end of the day the business is not successful how will I be able to pay back the loan I have collected ?

 

[WATFORD]

Sometimes people become successful from borrowing loan from bank while others fail to benefit from and ended their life in prison so I dont advice anybody to get from bank instead you start your business with your low capital.

If you can manage your funds, your small business can grow to big business.

 

[blessingc]

Before you start a business, you should plan well and not build your business on debt, less it becomes hard to pay back. The capital of a business should be a personal income. A money you raised or saved for the purpose of starting up your business.

Borrowing money for your business is not the best how much more taking a loan from the bank with a collateral, when you don't know what the progress of the business will be.

To be eligible to collect bank loans, your business must be consistently profitable, which disqualifies the majority of startups, because the bank cannot give you loan when they don't know the strength or ability of your business to oay back the loan.

The process of taking loan from the bank is complicated and stressful, you will be required to fill out excessive paperwork, and the terms of interest will be quite complicated. The process will not be quick either, often, it takes several months to qualify and obtain capital from a bank.


You need a good collateral to be able to take loans from the bank, no bank will give you loan without a collateral, they need to protect themselves in the case that you can’t make your payments.

 

[Ajebo25]

If you ask me I wouldn't advise you to take a loan from a bank simply because there interest rate might be too big for you to pay back but if you think that the money which you would get from the loan with bring a profitable business that can make you pay the money back in every shot. Of time then you can go ahead and take the loan but if its in business that's come out generation income or proof is in a short. Of time then I advise you bro money from someone not a bank because it bank can come and take away your collateral and bones give you back even when you have the money to pay back but when you bro money from someone and you keep it collateral you can take your collateral back whenever you have the money to pay back.

I think the Bank should lower get interest rates for them to get people to Bro money from they are bank if not the would be losing money every time they should also learned to have patience with people in case those people who borrow money cannot be back at did time which they signed to payback

 

[Oluwasegun purpose]

I Will advise you not to try to borrow money from bank to start a business because that money is your capital and it bad to use borrow money as capital because that business will not move and you will not be able to see any gain in that business so if you are now doing that kind of business without seeing any profit how are you going to pay back your loan and in that load you collected from the Bank they must be interest in it just think about it starting a business a with a loan and not see any gain or profit in it that means you will not be able to pay back..... So I will advise you not to start a business with loan from bank or anywhere else because it ends up being losses..if you want to start a business let the capital be from you own money not from a loan own

 

[moneyteam]

There are a lot of factors to consider when deciding whether or not to borrow a loan from a bank to start your business. Like how risky is your business? What is the interest rate on the loan? How long do you have to pay it back?

Overall, it's generally a good idea to borrow money from a bank if you can afford to pay it back on time. That said, there are always risks involved with borrowing money, so make sure you do your homework and weigh all the pros and cons before making a decision.

 

[Holicent]

It is important to know the difference between debt and equity financing before deciding how to fund your business.
While debt financing involves taking loans from financial institutions, capitalist investors or even family members and friends, it is not recommended for startups in their early stages of business.

On the other hand, equity financing entails selling of stakes in your company with an aim of raising capital for your business. For example, when a company issues stocks to the public, it is said to be raising capital through equity financing.

Entrepreneurs in their early stages of business should be cautious while applying for debt financing as they may run into trouble if they cannot pay back on time. Lack of adequate cash flow is one of the biggest reasons why small businesses fail. Asking a loan from financial institutions should be your last resort when looking to raise capital for your business.

The best way to avoid taking a loan is simply by creating a budget and living within those parameters. The idea here is to spend less than what you earn.
Dealing with debts in the early stages of running a business can be stressful since it does not leave you with any money for emergency situations such as repairing broken machinery or replacing employees who have resigned from work.

 

[Elisha755]

There has been a lot of people asking questions like this and I am creating this thread to enlighten people about it.
In my own limited understanding I don't think and I would never advice any body to borrow a loan from bank or any financial institution and all those Loan app to start a flourishing business
I will advice anybody to Hussle and work for a while to gather up some money to start a new business
A friend of mine applied for a loan from a loan app and he was given a stipulated time to pay back but unfortunately he was unable to pay back now his Bvn has been blacklisted now he can't perform any transaction on any of his bank account because he was unable to pay back his loan with the six months he was given so I will never advise anyone to applied for a loan any where
Thank you.

In Addition, before going for any investment you need to save a lot of your earn.

Someone that has nothing can not put up the plan for investment. It only someone who has work really hard before rising a earn.

And it not all investment you give a try, every thing has his/her own time. So always think before doing any investment.

 

[Ithedicious]

It is always very difficult to say , especially when people consider getting a loan to start up something . This loan you are getting to start up something my could really help you in so many ways and sometimes if you're not careful you might likely fall into a serious problem too.

If people really want to get a loan to start up anything , then they should consider so many things before making an attempt. Just like you have just said if they simulated time for you to pay back the loan will be favorable for you , then you can go ahead to get a loan. You have to also analysed to see if the time given you to pay back the loan will be enough for you to generate profit to pay back .

If that won't really be enough based on your own prediction then it is advisable for you to forget about loan since it won't really help you at that point.

They will even ask you to keep a collateral before you are also able to get this loan . I suggest that people should just rather look for a way of getting money to start up a business without loans.

 

[allison001]

I see a lot of business entrepreneurs getting loan from banks or any legit source to start up their business, this means that getting loan from bank to start your business is not a bad idea. It won't be a bad idea or decision if you spot a profitable business you can use that loan to establish.

There are so many things we should put into consideration before getting a loan from bank to start a business.

First of all, we must know and decide a good business in which we can be making or generating daily income. Another thing that will make getting loan from Bank a good idea is when you have a good plan, have your daily target and also work towards your target.

What are some of the business we can get loan from bank and be able to settle or clear the loan?

Selling foodstuffs
So many people get loan from banks to start up a profitable Business by selling food stuffs. It's a very good business idea because we do it everyday, so anybody getting loan from bank to start this business can surely settle the loan.

So getting loan from bank to start a business isn't bad.

 

[Kingsley]

Alot of people have found themselves in that position where they believe that the only way to get their business up and running is only through accessing loans from banks and even microfinance banks. But this is not always advisable mostly for a start up because at this time the business has not gather enough momentum to withstand the challenges that is associated with a new business. Even if the business owner has gathered some level of experience it will still be difficult for the owners to handle issues that might arise in the cause of running a fresh business because only a few people would have gotten information about the business hence patronage will be somewhat low for the time been. And remember loans will certainly generate interest and it has a time bound when repayments wound be expected hence it will cast somuch pressure on the business owners and the business itself.


It is still better to partner with other investors with like minds. And also get a job and work for sometime to be able to gather some funds to support the business. Then if you must take the Loa, you must be prepared to work extremely hard to meet up the obligations.

 

[funmi]

This is a no no idea for me. It is very very bad to take a loan from banks and invest it in a business. Especially when the business is a new one or the business you are just starting, it is a very bad idea and poor decision to take as far as I am concerned.
I have always discouraged people from making such decision because I know it is very bad and it is not advisable. A new business that is just starting will face alot of challenges, some people may be forced out of business in their first three months in the business.
If the business becomes challenging and people can no longer cope with keeping up they may forced to close the business.
How will such a person who has taking loan from the bank survive this type of challenges? Their will be a great loss for such a person.

 

[Rachael]

Well, this depends on your choice because no matter the level of advise you are given, what you have in mind is what you would still opt for. First of all, you should recognize the fact that, getting money from the bank has its own merits and demerits. As it stands, there is no bank that would give out loan without going through your credit history and if the credit history is negative, you would fins a hard time obtaining the loan.


Also, for you to get loan, you should make out a plan on how you hope to repay incase your first plan does not work out. This means that, you should look for other ways in which you can make money or have a collateral equivalent to repay. To me, I prefer loaning money from the bank than opting for all these online loan apps, this is because, the timeframe given by banks for repayment is reasonable. The problem is not about getting the money from the bank but the major issue is how well you ensure that the business is productive and also able to draw the attention and patronage of customers as the case may be.