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Is It Advisable To Start A Business On A Loan? - Business - Nairaland

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Is It Advisable To Start A Business On A Loan? by drealbenard(m): 10:15am On Jan 05, 2022
One of the most important lessons i've learnt in business is to never take a loan to start a new business.

There is no assurance that your new business will succeed (as a matter of fact, 50% of new businesses fail within their first 2 years), but the number one assurance you will have when taking a loan to start a new business is that you are going to pay back that loan. The bank doesn't care whether your business succeeds or not, all they care about is getting their money back, with interest.

The best time to take a loan is when your business has already gained traction, i.e you now have lots of customers and will need to expand in order to meet their demands.

Loans should be taken to improve an already established business, not to start a new one.

With an established business, you will have customers, sales and some profits that will enable you pay back your loan. Unlike a new business that requires lots of time and hard work to attract customers and make your first few sales. Time you might not have before needing to pay back your loan.

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Re: Is It Advisable To Start A Business On A Loan? by Oyin2212(m): 11:40am On Jan 05, 2022
drealbenard:
One of the most important lessons i've learnt in business is to never take a loan to start a new business.

There is no assurance that your new business will succeed (as a matter of fact, 50% of new businesses fail within their first 2 years), but the number one assurance you will have when taking a loan to start a new business is that you are going to pay back that loan. The bank doesn't care whether your business succeeds or not, all they care about is getting their money back, with interest.

The best time to take a loan is when your business has already gained traction, i.e you now have lots of customers and will need to expand in order to meet their demands.

Loans should be taken to improve an already established business, not to start a new one.

With an established business, you will have customers, sales and some profits that will enable you pay back your loan. Unlike a new business that requires lots of time and hard work to attract customers and make your first few sales. Time you might not have before needing to pay back your loan.

Wisdom
Re: Is It Advisable To Start A Business On A Loan? by drealbenard(m): 12:40pm On Jan 05, 2022
Oyin2212:

Wisdom

Thank you

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