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Funding a business
Why thinking of securing a business loan could be a bad idea.
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[QUOTE="Yusra3, post: 335378, member: 31907"] Took on too early business debt is risky if cash flow is unproven, hence became a liability irrespective of the revenue. It can prepare it for rapid growth before maturing its operation. Equity financing is more flexible. Loans require personal assets as the collateral which may be lost. Average cost of funds increases eroding the profitability. With too much debt leverage a business is more vulnerable in the times of economic downturn. Loans are accompanied by stringent repayment terms which leaves little scope for reinvestment. For lean startups, either bootstrap methods or equity are less risky funding types. [/QUOTE]
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Funding a business
Why thinking of securing a business loan could be a bad idea.
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