What do you think about getting a loan to start a business?

[Kennysplash]

A business is like a gamble, you t had such a high probability of not turning out to be what we expect it to be. An entrepreneurship poll made recently states that 55 percent of businesses goes bankrupt on their first trial.

In that case, is it advisable to get a loan to start a business?

 

[ugocious 1]

Actually before starting a business you have to consider things like where you can get the money and if you can pay back at the required time if not it can be actually disty

 

[Shortie]

Getting a loan to start a business without having any business plan or backup if things do not go the way you hoped is always a bad idea. Getting a loan has to be done at the right time and with the right plan.

Many have started businesses after receiving a loan and many have been successful, it's never a bad idea unless it's done on a whim.

 

[Bizdustry]

Getting a loan is good but you have to be careful of high APR interest rates. Sometimes the APR can be so high, that’s it’s worth saving the loan repayments yourself and starting the business in a few months time. It depends on your circumstances

 

[Uptrendfinancialsignal]

Getting a loan to start a business can be beneficial, but it's not what I'll advise. This is based on my personal experience. So, I'll advise you to explore alternative funding and ensure to put a solid business plan in place.

 

[ken_gitahi]

If you have to take a loan when starting a business, take the least amount you can, have a solid business plan, and have a plan for what to do in case things do not go as expected. Many success businesses I know were started using loans, but their owners had solid plans and had done enough research to understand their business, the market, and customers to reduce the risk of failure.

For me, I would rather take a loan to expand a business rather than start one, opting for alternative funding options for the latter option.

 

[MrDawn]

I'd rather just save up my money and start a business rather than go get something that has a deadline that I have to pay back in interest.

 

[fdk]

I was looking into business loans during the COVID pandemic, when interest rates were literally like 0.1% and the Government were backing loans for businesses, so banks were throwing money around left, right and centre. I decided against it, mainly because I thought that the jobs market would recover quite quickly and I'd be better off in a secure job than running my own business.

That being said, it's always been a dream of mine to run my own business, and I'm somewhat gutted four years or so on from the height of the pandemic that I didn't take advantage of the ridiculously low interest rates and governance around loans at the time. Having looked into it recently, I can tell you one thing for certain - you're not getting a loan for a new business for anything less than 8% APR nowadays, and the lending criteria has tightened significantly. To get any significant kind of funding, you'll likely require a really good personal credit rating and you'll probably need to put collateral down on the loan or something (ie risking your house/car/savings/investments) for the loan. Imo, really not an attractive environment right now, even if I have got a great idea that I think will make a lot of money.

 

[CTS]

Getting a loan for business is like paying out on a schedule a portion of your net profits. You don't really want to get stuck in that cycle. I feel a business loan for capital equipment or against your receipts is common in business. But I wouldn't borrow to support myself while the business is starting. That's what second jobs are for.