Is it Right to Take a Startup Bank Loan?by Finway Capital Empowering People Financially
It is a known fact that for any business, capital plays an important role. The startup business usually avails small business startup loan to overcome various expenses like the location of the business, furnishing, equipment, and furnishing. While it may sound that taking a loan is a good idea, there are so many things that will up come when you are availing a loan.
Mark Cuban once said that only "Morons start a business on loan". While this statement sounds a little harsh, it has a great hidden meaning. If you avail a bank loan for starting any business, you have to start repaying the EMI from the preceding month only. You will be under huge financial pressure from the first month itself. This is not right for the business. But as it is impossible to start any business without capital, you have to get the business loan.
Before even applying for a startup loan for new business, make sure that you are dedicated and will make this business a success. You have to treat the bank money as yours and put in a lot of efforts to make use of it as efficiently as possible.
Here are some of the questions that you have to ask yourself before you go for a small business loan.
· Are you eligible to get the bank loan? Is your financial record sound enough to get you the bank loan?
· If any bank rejects your loan application or if you are not qualified according to the bank standards, your credit score will be affected.
· The loan that you take should generate more revenue. If you take a loan and it isn't able to bring in more revenue for your organization, you will get stuck with repaying the loan from your own pocket. So make sure to have a business plan that is capable of generating revenue on an immediate basis. You should be able to repay the loan amount without any hassle, and there shouldn't be any future requirement for you to borrow a loan.
· If you are a startup, it won't be easy for you to get a loan from the public bank. If you go with a private bank, you should have collateral security as a backup.These are some of the things that you have to think and consider before getting a small startup business loan. There are so many big businesses that have started out small on loan and made it big, so there is no need to worry about getting a loan.
Created on May 6th 2019 05:34. Viewed 81 times.