Consequences of using credit facility to run a business.

[Dorcey]

Using credit facilities like obtaining loan from cooperative may have negative or positive impacts. The negative impact includes if the business fails to succeed, the loan may become difficult to repay while the positive impact includes it will make us work harder in order to repay the loan.
Do you agree with my assertions or you have another opinion?

 

[Niftyyem]

My own opinion is that it is better to start up a business with your own funds no matter if you have to start small. However, when the business is now on solid footing with customers and generating profits, you can take a low interest loan for the sake of expansion.

 

[Alexandoy]

My issue with using a credit line for funding the business is the pressure on the payments. There is a minimum monthly installment and the smaller the monthly that you pay the bigger the interest that is charged on your loan. The best way to operate a business is to be financially independent by having your own money. If you can sell an asset like a car or a land then that is better instead of getting a mortgage that you may not be able to pay back.

 

[Kane]

Financing your business completely with a loan is not a good idea. When you finance your business with 100 percent loan, it will be a financial burden later on. It will take time to establish your business and generate income, however, you will have to start repayment from the next month.

 

[WhiteHouse]

There's nothing wrong in using loan or collecting credits from loan facility, what really matters is what you are doing the business with, Most Investment you see get done are done with Loans and credit. Once you have a focus on what you want to do with the credit stick with it.

 

[Trexxxy]

Well yeah, it is always a probability that the business will fail or succeed, however before anyone dives into the business. There must be a clear plan that would only lead to the success of the business. One must strive to attain success to be able to repay the credit owed.

 

[Snazzy001]

I have come to discover that nothing brings setbacks like using credit facilities to run a business.the profit you are suppose to make will now have to serve as the interest for collecting loan, it is not really advisable .

 

[Denuola]

Financing ones business with loan entirely is a bad idea for someone with just one source of livelihood. It's going to be a financial burden on the person.
It will take time before the business will boom and profit is made.

 

[Ayokex]

It is absolutely not a good idea to start a business on loan because you can't guarantee 100% the sustainability of the business. If you start business with credit facility and the business later collapse, you have eventually lose two thing, first your investment and second what you used a collateral. If you are unable to pay back the loan the creditor will come after you and get all used as collateral.

 

[Ralphjoe]

Thr truth is if you want to established a big business, then obtaining a business loan is an absolute necessity. There is no big corporation today that doesn't take loans for its business so taking loans is an important part of a business if it wants to succeed.

 

[Prettyjanie]

Starting a business with credit facility is a huge risk, you have to ensure that you do very well in your business to enable you pay back the loan from the credit facility, otherwise you will be embarrassed with the legal action they will commence against you.

 

[Emma Aneni]

It is absolutely not a good idea to start a business on loan because you can't guarantee 100% the sustainability of the business. If you start business with credit facility and the business later collapse.

 

[Ifective]

Your first source of income for a business should be from yourself either from investments or savings. When one gets loan to start up a business that is through credit facilities, the disadvantage is that one might not be able to pay pack if the business doesn't succeed. That is why one must have a good business plan before venturing into a business

 

[Seun4luv]

Encouraging impulsive and unnecessary “wanted” purchases. High-interest rates if not paid in full by the due date. Annual fees for some credit cards can become expensive over the years. Fee charged for late payments.

 

[Richard92]

It is very challenging to use credit facilities to run a business, because paying for those things and also trying to incur the experience of the business will be too much for the owner of the business. if the business is not bring much income it can run at loss.

 

[Adetayo100]

Encouraging impulsive and unnecessary “wanted”
purchases. High-interest rates if not paid in full by the due date. Annual fees for some credit cards – can become expensive over the years. Fee charged for late payments.

 

[Tinaconcept]

You can start a business with your savings, loan from friends and family or get a loan from the bank. When you start a business with a loan make sure you follow the loan standard to pay while still running the business the consequences comes up when you refuse to pay.

 

[Klismannm12]

is in a credit facility to operate a business is not a problem as long as you are able to maintain profit at the end of the day it's only businessman I cannot believe it the richest man in Africa become the richest man in the world uses his bank money as a letter grade is wrong their business.

 

[Dylinks]

Running a business on loan can be frustrating at times especially when business is not moving well. Also, the debtor is always a slave to the creditor. I would advise anyone going into business to atleast have like 80% cash and sort out for the 20% as loan; by then the pressure will be reduced.

 

[Shayo]

Yes, you're right.
Thats the reason why it is advisable for people to start with any other means than loans, especially businesses without a backup plan. Loans are not easy to pay because it will keep increasing with interest if payments are not made in time.
The thought of having some debts to pay off may also prompt the business owner to work harder too.