Is it advisable to procure a debt to start up a new business?

[Jonaville1]

I have someone who is interested in the sale of clothes, but he doesn't have any start up capital. He intends to get a loan to get his business rolling, and he seems so sure about repaying it back on time. But I have a bad feeling about this. Is it really wise to go into debt to do business you are just venturing into? I'm not trying to be pessimistic here, but what if the turn up is lower than what he expected? I tried to talk to him about it but he just shrugged it off as no big deal.
Should I leave him to go on with his plan or try to dissuade him?

 

[Niftyyem]

He could get a loan if it is from family or friends and there would be no need for paying interests and where there would be flexible payment methods. In the case where this isn't available, he should avoid loans. If he does not heed your warnings, just let him be.

 

[Damscooguns73]

Concerning procuring a debt or a loan to start a business. Well, I will say that he should not bite more that he can chew, he should know much exactly he need to start and estimate of how many months or weeks the business is going to run and yield well to pay back the loan

 

[Trexxxy]

Well If he is sure that he can repay or map out a particular way to repay the loan, then he can go ahead. With everything going on now I wouldn't advise he takes the loan ,covid and all. I think he should just look for the money elsewhere.

 

[Deysi16682]

Hello, you have another option which is to associate with someone and that person who puts the capital and with the profits obtained in the business you are canceling, it is an option, but before requesting the loan you have a feasibility study so that you are sure that the business will give you the production to pay the debt and make a profit

 

[Ralphjoe]

Acquiring a loan to start a new business is okay but what I would advice anyone that want to venture into such is that they should make sure that the loan should a very small part of the business capital. The major source for new business should be your personal savings, contribution from families and friends, investment e.tc. This is so that repaying back the loan would be easy since the money that was borrowed wasn't that much.

 

[Sariana23]

I do not agree with the debts to invest, I am one of the people who thinks that it is better to invest with your own money little by little, when you have enough capital to invest in something bigger, you can do it. But, if you have complete confidence in your success, it is preferable to get the loan with family and friends and not do it in the banks.

 

[chicnthin]

I won't personally advise it to someone even though it's normal to acquire a loan to start a business. Why? Because that would be a double risk. You have to accumulate enough profits to pay those debts. For me, taking a loan would be acceptable if it's for expansion.

 

[Adexgrace]

It really depends on the financial status of the the person getting the loan. But I would not advise anyone to get a loan to start a business, I prefer starting with the little capital available and as time goes on it will become big. Starting a business with loan sometimes doesn't go well with business.

 

[Khezo]

If he can borrow money from family and friends without interest and there would also be a flexible pay back period then he can go for it. But anything like bank loan and others should be avoided

 

[GIFTMICHAEL]

I have someone who is interested in the sale of clothes, but he doesn't have any start up capital. He intends to get a loan to get his business rolling, and he seems so sure about repaying it back on time. But I have a bad feeling about this. Is it really wise to go into debt to do business you are just venturing into? I'm not trying to be pessimistic here, but what if the turn up is lower than what he expected? I tried to talk to him about it but he just shrugged it off as no big deal.
Should I leave him to go on with his plan or try to dissuade him?

Getting loan to do a business is not bad even if you have to pay with interest.

Nobody I mean no individual that is financially stable that he or she never borrow.
To procure debt with the good intentions to pay back when you succeed in your business is definitely not a bad idea.
Business is all about risk and you have to take some risk before you can succeed in business.

 

[Aniwhyte]

I would not advise anyone to take a lone just to start up a business, but if the person is very sure if his or her returns and gains after startup then he or she could eventually take up the loan but I would greatly advise that payment should be made on time to avoid all forms of embarrassment.

 

[Erik4150]

It is only wise to go into debt because you want to start a business only if you are 100% certain that you are capable of clearing the debt.
Entrepreneurs take loans from banks all the time in order to set up businesses so it is completely normal.
I would recommend he takes a loan from family and friends instead of borrowing from the bank.

 

[Damismiling]

Getting a loan to start up a business, to me it is not a very good idea, and I would not suggest you do that, what you should do is that, get some paying work first either online or offline, gather some few money from there you can use it to start up little

 

[Shaffy]

It sounds like he doesn't have any experience in the field he chose, which makes the choice of starting the business with loans a very bad idea.

If the person was experienced and was sure to scale the bus, it would be ok, but for a beginner, the person can end up losing everything, which will put the person in a tight corner.

 

[Nurudeen]

Getting a loan to start up a business is one of the most disastrous thing to do as a prospective Business owner who doesn't have personal savings. If the Business doesn't move well, the finanacial Institution that gave out the loan can mount pressure on the borrower to pay the loan which can collapse the Business.

 

[Lyrrex]

I don't always advise people to take a loan and start up a business because if the business crashes you are at risk of going to jail anyone who is interested to start up a business must raise Is own capital legitimately,but you can get grants from government to start up a business that one is much more preferable

 

[BrolySSJ]

I have someone who is interested in the sale of clothes, but he doesn't have any start up capital. He intends to get a loan to get his business rolling, and he seems so sure about repaying it back on time. But I have a bad feeling about this. Is it really wise to go into debt to do business you are just venturing into? I'm not trying to be pessimistic here, but what if the turn up is lower than what he expected? I tried to talk to him about it but he just shrugged it off as no big deal.
Should I leave him to go on with his plan or try to dissuade him?

Getting into a debt to start a business is a very risky thing because the business does not work out then you have nothing to fall back on, and then it will be very hard to repay the loan. I think that if your friend has a very solid business plan and has done a lot of research as well that it can be considered to be okay to do this, however not in the case where there is a lot of risk.

 

[Kennysplash]

I have someone who is interested in the sale of clothes, but he doesn't have any start up capital. He intends to get a loan to get his business rolling, and he seems so sure about repaying it back on time. But I have a bad feeling about this. Is it really wise to go into debt to do business you are just venturing into? I'm not trying to be pessimistic here, but what if the turn up is lower than what he expected? I tried to talk to him about it but he just shrugged it off as no big deal.
Should I leave him to go on with his plan or try to dissuade him?

Securing a loan to start a business is a bad idea, it should be the very last option if all fails. If the business performs lower than expectations then there will be problems. He can try to get in touch with families and friends first, to see if he can get an interest free loan.

 

[Jonaville1]

Getting into a debt to start a business is a very risky thing because the business does not work out then you have nothing to fall back on, and then it will be very hard to repay the loan. I think that if your friend has a very solid business plan and has done a lot of research as well that it can be considered to be okay to do this, however not in the case where there is a lot of risk.

Yes, like you pointed out, I see too many risks here, that's why I'm concerned about it. But he doesn't seem to care. He is too optimistic for his own good, no proper plan ,no back up plan, nothing at all. Who does that? Definitely not someone as careless as him.