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Would You Ever Recommend Starting A Business On Loan?

Allegrif

Allegrif

New Member
A lot of people start up their businesses on borrowed money. I've never really understood this though, it seems like a really risky strategy. Have you done it, and if so, did it work out how you intended in the end?
 
St Rhenium

St Rhenium

New Member
Well you need a solid business plan to be accepted for a loan like this, and the banks know what they're doing. If you have any risk of falling through, you'll be unlikely to get the loan in the first place. So ultimately, yes, if it's well-planned there's absolutely no reason this shouldn't work.
 

Zarostulus

New Member
Yeah, I can see your concern, but the bank will sniff out any worries to protect their money. If they're not happy, there's no loan.
 
Allegrif

Allegrif

New Member
There still has to be some risk though - there's a reason people end up in debt with the bank: they borrow when they shouldn't have?
 
C

cruzo

New Member
Yes I know what you mean when you borrow money you need to think how to make enough profit to take it back. I would rather to start with something small than to take a risk with borrowing cash.
 
MarkB

MarkB

New Member
Staff member
Used correct debt can be a very useful tool for small, medium and large sized businesses. You should respect debt but certainly not be afraid of it. As for whether you should use a business loan to start a business, I would say how badly do you want to start the businesses? Many successful businesses were founded on debt and while in a perfect world we would all be debt free, debt in business and looming loan repayments do help focus the mind somewhat - especially when you are looking to put food on the table for your family.
 

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