do all businesses need loans??

Discussion in 'Growing and Managing a Business' started by iamjohns, Jul 22, 2010.

  1. iamjohns

    iamjohns
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    i want to start a new business but its small do i have to apply for a loan or is it better for future expense ??
     
  2. Mountain Man

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    If you have the capital, and don't need a loan there really isn't a reason to get one other than to build a good credit rating. You can sometimes get a interest free incentive loan through the government to start a new business.
    If you are starting slowly, or part time at first you may not need any extra money. It would also depend on what type of business you are starting.
     
  3. jacoby161

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    That depends upon the nature of investment and how much you hold .Generally large industries needs huge investment that may need loan .
     
  4. brownnataly21

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    If I were you I wouldn't apply for a loan as it may mean some kind of burden in future. But if you feel that you can't do without a loan, choose carefully.
     
  5. Fergal

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    I'd agree with the other posts, it's better not to take on the burden of a loan, with the added costs of interest repayments, if you don't need the loan. Have you prepared a business plan with cash flow projections for your business?
     
  6. jack123

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    Hi

    As a small business owner, your most difficult task is finding the money to operate your business. Taking the necessary steps to prepare for a small business loan can minimize the difficulty. Learn what you need to know to clinch the loan deal. Banks and other lending institutions cite risk factors as their main reason for turning down small business loan requests from startup businesses. Yet, you can still get a loan for your business by proper preparation.

    Thanks
     
  7. Mountain Man

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    Although a loan may not be needed you may want to have access to the funds, perhaps a line of credit. I am not sure what type of business you are thinking of but suppose a large job came along and you needed to purchase a large amount of material, hire part time staff, tools or any number of things.
    I personally did not get a loan but I do have credit at a few different suppliers. A loan would help me to pay for training or tools so I could offer more services. Unfortunately this prevents me from bidding on very large jobs.
     
  8. 50Cent

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    If you have the capital it would be the best. Borrowing loans from bank is just an addition burden on top of all your business expenses. Just that borrowing from banks you will have to pay for the interest, borrowing from friends you can have no interest and can also delay the loan deadline provided your friends understand your current situation. But the best way is not to borrow. Mine post is just an advice.
     
  9. John1

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    It's probably more wise to go for an investment rather than a loan itself. At lease with an investment (either from a company or person) they know the risks of your business being small so that if it ever goes down they can't expect their money back.

    With a loan no matter if your business goes down, you will be required to pay it back and usually with a lot of interest.
     
  10. 50Cent

    50Cent
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    Yeah, I am agree with this.
     
  11. Fergal

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    One thing that's worth remembering is that it is generally a lot easier to get a loan when you don't need it, than when you do need it. So if your business will need finance at some time in the future, better to start looking for it sooner, rather than later.
     
  12. John1

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    A very true statement Fergal.
     

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