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

[Janita]

My advise is to start business with your own money because it may take time to het profit after starting business than it will be hard to you fo pay the debt money and than you may face losses at any stage due to wrong followed way.so of you want to procure of your business than must arrange money yourself not from debt.

 

[Kamon c4]

In my opinion if someone had to take a loan out from their family and fiends it is generally not a good idea. AS humans there are many that are unable to separate the difference between a professional relationship and their personal relationship and therefore if there are cases where the business will not work out or that it doesn't then I think that the person could likely expect that the friend/family will leave the loan seeing the situation they are in. This also reduced their motivation in the business as well. And yes you are right. The interest is the only benefit for the loaner especially considering the large risk that they are

I beleive we’re saying the same thing and our points align. Veteran business owners will tell you loan is the best way to start up a buisness. Interest is an ideal way for the loaner to make profit and rewarded for the risks they’re taking. I’m very pleased with your point 🍺

 

[BrolySSJ]

I beleive we’re saying the same thing and our points align. Veteran business owners will tell you loan is the best way to start up a buisness. Interest is an ideal way for the loaner to make profit and rewarded for the risks they’re taking. I’m very pleased with your point 🍺

May I ask though, why do you think that veterans think that a loan is the best way to start up a business? Would it not be better to start up a business from your own pocket in terms for your own capital. It thinks that people are likely to have much more motivation when It comes to their business then knowing that it is their own capital in there, and they will also go the extra mile as well

You also make a good point especially with interest and the profit that a lender can make for the risk that they are taking.

 

[ahmedo24]

May I ask though, why do you think that veterans think that a loan is the best way to start up a business? Would it not be better to start up a business from your own pocket in terms for your own capital. It thinks that people are likely to have much more motivation when It comes to their business then knowing that it is their own capital in there, and they will also go the extra mile as well

You also make a good point especially with interest and the profit that a lender can make for the risk that they are taking.

Actually starting business with either loan or personal savings, depends on individual financial discipline and commitment, some tend to more serious and committed to business when they take loan because of meeting up with payment while some are also serious with their personal money because they want it to grow.

 

[Alexandoy]

Just reading the title already has made up my mind with the answer as a big NO. It is foolhardy to start a business with a loan because it is like starting up with no capital on your part. My usual advice for a start up is to have more than then estimate capitalization of the intended business so that when the going gets tough you have a cushion for the tight cash flow. If you have a loan to pay then your hands would be tied in paying the installments and interest on the loan.

 

[Nicklas22]

There is no rule of thumb to use when determining whether a startup should take on debt. Debt can often be faster, easier, cheaper and less of an overall headache than equity. Understanding your business needs and how effectively you will use capital can determine if debt is right for you.

 

[Hasan Raza]

Depending on where you are in your life and your career, you might be facing a little – or a lot – of personal debt. Many would-be entrepreneurs owe money on credit cards, student loans, mortgages, and/or cars, and these heavy outstanding balances could put their dreams of business ownership on hold.

 

[Koldej]

As easy as it seems , procuring debt to start up a business can be a very dangerous task, but that shouldn't stop you , there are big business that still procure debt, but you will need to do proper evaluation of the business you are intending to start in other not to loose out

 

[BrolySSJ]

Actually starting business with either loan or personal savings, depends on individual financial discipline and commitment, some tend to more serious and committed to business when they take loan because of meeting up with payment while some are also serious with their personal money because they want it to grow.

This makes sense. There are financial obligations that they would have to meet when they take a loan, and they have to ensure that they make each and every payment for that loan as well, so it can be considered to be quite a large motivating factor for them in terms for their business and paying back the money in the first place.

 

[maventiger]

@Jonaville starting a business with a loan is not too bad, but you should try as much as possible to avoid taking loan from a bank at first. Seek other alternatives which might give you time to refund the money 💰 . Alternatives such as thrift, loans from friends and family which doesn't request interest.

 

[Jonaville1]

@Jonaville starting a business with a loan is not too bad, but you should try as much as possible to avoid taking loan from a bank at first. Seek other alternatives which might give you time to refund the money 💰 . Alternatives such as thrift, loans from friends and family which doesn't request interest.

Yes you are right, taking loans from bank is not a good idea. Personally i wouldn't try it because I know the risks and implications that come along with it. I'll rather borrow from family, relatives or close friends, that is if borrowing is necessary in the first place.

 

[Kinglegend01]

Generally I would never advice anyone to get a Loan to begin a business maybe because I never like to be indebted to someone or from past experience it never worked out well for me. But I can advice him or her to try getting from friends and family, I don't like getting loans from external sources.

 

[Sake]

In selling/retail business absolutely not. Because there's a high risk of it failing for many reasons. I don't think it's wise to rely on Loans to start up your own business because it may leave you with a lot of debts if you failed your business venture. The next move will be what? Get another loan to start another one? :/

 

[Ebuka Stephen]

Well I think it is advisable to procure a debt to start up a business most people do not have the capital venture into a business. But when procuring a debt you must be sure that the business must be able to workout well.

 

[Ridorz]

Your friend can get loan to start a business but it's not advisable to get loan from bank. Your friend can get loan from relative (family it friends) that will collect a interest on the loan. Whatever, before you get loan to start a business you must have knowledge or idea about a business you want to start.

 

[Ranoo]

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?

All I can say is let them borrow and hope for the best, Let them work hard in their capital and then Allah will give them progress, Business always moves forward with time and human effort,

 

[joy101]

Getting a loan to start up a business is not bad, but you have know the kind of business you about to start, but I know clothes business is a lucrative business getting a loan for it is not a bad idea, at the time you sell upto one or two months you can get what you want.

 

[Abiodun omolayo]

I wouldn't totally agree with getting a loan to start a business. That is will really affect the business at the long run. Instead get a job first and save up or invest the money you get from that job and make it grow to a minimum amount then use it to begin whatever business it is you want to start. That in fact gives one peace of mind.

 

[Ojonuyo]

It is not advisable. That is the fastest route to run your business down. It is not a nice planning at all. Do not make the mistake of borrowing and procure debt to run your business because automatically you are a debtor and would not be able to manage your business finances because you would be busy paying the debt you owe.

 

[Frank]

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?

You can only advise him on this and nothing more. The truth is that getting loan to start a new business is somewhat difficult since you are starting new while borrowing on a heavy interest. Is that the best he can do? Unless the business is sure of giving 100% profit in return, then this is not advisable at all!