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?

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

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.

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

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.

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.

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.

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.

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.

I personally don’t like the idea of taking out a loan to start a business. It can create financial pressure and risk, especially if the business doesn’t do well at first..

Not sure if I would personally take a loan out to start or kickstart a business, but if I did, i would want my own income to be able to handle the potential of it failing in a year. All info I have heard and read, states that if people plan it out appropriately, you should have enough to pay yourself a modest income for the year, and cover basic expenses at the same time, regardless of success.

My boyfriend just got a loan for his new business and honestly I don't think it's a bad idea if you've really thought the business through and stay realistic. Usually the opening of a new business is the most expensive time because it's when you have to buy a lot of one off purchases and you aren't really getting any money in from your new business.

 

In my boyfriends case I really didn't have an issue with him getting a loan for the business because he has been thinking and working on this business for years and years and is very clear on what he needs to do/get done in order to start his business and work to get it successful. He needed to also get a patent done, buy some equipment and make some models/protocols of what he will be selling. One of the reasons I was so comfortable with my boyfriend taking the loan is because he has been very open and honest with me on what he is going to be spending his money on and what he needs to have/get in order to start selling his products as how much everything will cost. I also believe in his business a lot and feel like he will be very successful with his business.

 

I think before anyone even thinks about getting a business loan they should have a business plan in place, know exactly what they need in order to start/open their business and be realistic as to when they will be able to pay off the loan and when the business will start to make an income. I think a lot of people start a business without having a lot of direction or knowledge as to what it will entail to create a successful business and so that's why most businesses fail. Getting a loan isn't necessarily a bad thing, but you also need to be realistic and honest about whether or not it is a good idea.

If you open a business in the correct way, loans can be beneficial for the process as start up costs are incredibly expensive. This is where having proper guidance and direction can be beneficial. For instance, an LLC will allow your personal assets to remain mostly separate from your business assets. If a loan is being considered, using the right types of loans are paramount. I wouldn’t take out a personal line of credit to fund a business expense.

I would highly recommend getting a business loan if you're wanting to start a huge business and need money, as long as you have a good plan set up to make your business successful so you can pay that loan off. I also recommend having a financial advisor to help you out along the way too.

Loans can be very difficult especially for businesses that lack a solid plan and a proper risk management in place. Taking a loan for a business that lacks a proper plan is a recipe for disaster. Other than that, it could be a lifesaver for your business.

Having attempted three small businesses in the past, this is the second most popular choice. (The first one being bootstrap it), Unless of course, you're starting up a Public Corporation and have a phenomenal idea with people excitedly backing your ideas with piles of cash... but I digress.

 

I'm looking to try for a fourth time, just as soon as I figure out what it is exactly that I want to do, AND is something other people want/need and are willing to pay for it.