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Taking a loan for my business

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Darlene L.

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One of the biggest steps we could make when deciding to grow our business is taking that much needed loan.

What is your point if view about this? If I finance my business by taking that loan instead of going for investors, would that be a better decision?

I'm also a loan agent by profession and I connect US businessmen to financers around US and Canada. I could even assist in helping some of the businessmen here in taking that funding that they need as long as they qualify.

I have observed several clients that I've had who took that much needed financial boost and are doing quite well in terms of paying back what they owe. I guess as long as your projections are right, then you wouldn't really have any problem.

I haven't really tried taking a loan myself altbough it is one of the things I am currently considering since having partners are quite complicated.

So which is better? Getting investors or that loan?
 

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Darlene L.

Darlene L.

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I need to invest on heavy equipment and hire new designers for my business. Last time I inquired about the idea of getting investors, now I'm thinking about getting that loan myself.

There are many borrowing options for people who needs the money nowadays... I guess there really is a lot to go around.
 

Alan LT

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Remember whatever the outcome of your business, you will have to pay that loan back. You have things like Kickstarter to help you raise your money.

Also, if you do take a loan watch carefully who you take it from. If it's from a friend or family member you can easily ruin the relationship. If it's from the bank, then you better pay that money back.

Hey I'm just an 18 year old kid... Wtf do I know. Don't take my word, go do some research. Good luck [emoji1417]
 

ShaeStyle

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I’m currently dealing with the same dilemma. I’ve been recently looking into loans to help finance my start up business. I haven’t applied yet but I am very interested.

I’m not sure how to go about finding investors that would invest in a start-up. I’m still researching into that.

I’m very interested in hearing about what you decide to do and why you chose that option?
 

jon.a

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I need to invest on heavy equipment and hire new designers for my business. Last time I inquired about the idea of getting investors, now I'm thinking about getting that loan myself.

There are many borrowing options for people who needs the money nowadays... I guess there really is a lot to go around.
Go find the recent 'Profit" episode with the custom lighting company. Marcus touched on equipment purchases.
 

Jeremy Groover

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I have never done either. I currently have a service business that I paid for the start up by saving up and doing the crappy odd jobs that no one wants to do. My start up was less then 5,000 so a loan or an investor was not necessary. In your situation I would look at it like this if I were you.

-Loans- Set amount that needs to be paid back. No matter the amount of money you turn (good or bad) you still pay the same amount.

-Investors (you give away a % of the business)- The more money you make the more money you owe them. The harder you work the more they get paid. I don't know about you but when I start a business, I want to keep as much as possible, even if I couldn't of done the business without them.

I personally would pick a loan over an investor +95% of the time. The only situation I would pick an investor over a loan would be if the start up of this business until the time you start making returns is an unusual amount of time. Meaning you wouldn't even get your feet wet before the bank was knocking at your door looking for your money. The only other time I would pick an investor would be if I did not qualify for the loan.

Some may not agree, but thats the way I stand until I am proven wrong, or I learn another situation.
 

Ninjakid

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One of the biggest steps we could make when deciding to grow our business is taking that much needed loan.

What is your point if view about this? If I finance my business by taking that loan instead of going for investors, would that be a better decision?

I'm also a loan agent by profession and I connect US businessmen to financers around US and Canada. I could even assist in helping some of the businessmen here in taking that funding that they need as long as they qualify.

I have observed several clients that I've had who took that much needed financial boost and are doing quite well in terms of paying back what they owe. I guess as long as your projections are right, then you wouldn't really have any problem.

I haven't really tried taking a loan myself altbough it is one of the things I am currently considering since having partners are quite complicated.

So which is better? Getting investors or that loan?
I would not take a loan for starting a business for this reason: The only thing guaranteed with this security is that you will have to pay bank the money. So if something goes wrong with your business, which you must consider the possibility, you will have to pay it back anyways.

The upside: you don't need to split ownership of your company.

I know several people who have started a business on loaned money, that business didn't work out, and they were in a less than desirable financial state because of it.

While investors don't want to lose their money either, they are professional risk managers, and a skilled investor would not risk more than he or she could afford to lose.

On the other hand, there are several successful entrepreneurs that started their first big business on a loan.

Does it work out for the best? Sometimes it does. Sometimes it doesn't. When it doesn't, it's usually painful. For me, I would see a large loan as an foolish risk despite the fact that there may be a good return.

So it's up to you. It might work out well for you. It all depends on if you're willing to take that risk.
 

DaveC

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Well....I think we need more info here. Is someone offering a 0% loan, no strings attached? Or is it a loan shark? Is Mark Cuban offering to invest, or your fixed income grandma?

I generally avoid debt personally am looking at it for some larger deals, on terms that avoid personal guarantees. I definitely have used investors, but generally with something to add to the business as well (experience, insight, connections, etc....)
 

Chris Kelsey

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I personally wouldn't ever take a loan for my business. I've been offered 1m+ investments for my business currently but I've declined as everything is going very well. With that being said, if I was doing a new startup and someone was willing to put 500k down for 15% in something that I knew was very likely to work (but I didn't feel like putting in my own 500k), then that could be a definite different possibility.
 

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MotiveInMotion

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I would not take a loan for starting a business for this reason: The only thing guaranteed with this security is that you will have to pay bank the money. So if something goes wrong with your business, which you must consider the possibility, you will have to pay it back anyways.

The upside: you don't need to split ownership of your company.

I know several people who have started a business on loaned money, that business didn't work out, and they were in a less than desirable financial state because of it.

While investors don't want to lose their money either, they are professional risk managers, and a skilled investor would not risk more than he or she could afford to lose.

On the other hand, there are several successful entrepreneurs that started their first big business on a loan.

Does it work out for the best? Sometimes it does. Sometimes it doesn't. When it doesn't, it's usually painful. For me, I would see a large loan as an foolish risk despite the fact that there may be a good return.

So it's up to you. It might work out well for you. It all depends on if you're willing to take that risk.
Thanks for saving me the time typing this :)

If you've got a profitable business, and want to scale, of course take out your loan because the numbers are there. If you have a good idea, and you're pretty sure it could work, definitely forget about a loan for now.

Prove it with the profit first.

 

JokerCrazyBeatz

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I would say only take out a loan if you know for sure you'll make enough profit to pay it back . I personally wouldnt do a loan just cus I hate owing people lol . But it's DEFF other options and ways to get the money you need if you're crafty
 

JScott

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I need to invest on heavy equipment and hire new designers for my business. Last time I inquired about the idea of getting investors, now I'm thinking about getting that loan myself.

There are many borrowing options for people who needs the money nowadays... I guess there really is a lot to go around.
Basically, you're in a situation where you need money but don't trust your judgement about your business enough that you're willing to risk debt versus equity. Correct?

Assuming so, go find a professional investor who is willing to invest in your company for straight equity and no personal guaranty.

If you can find such an investor, consider that validation of your business model, assumptions and financial projections, and then go get the loan instead.

If you can't find such an investor, you probably don't have a good enough business model, and you should probably avoid any debt on that business.
 

OldFaithful

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Have you considered bootstrapping the project? It's not as fast and it's not sexy, but it's much less risky. The downside is that you have to pace yourself and grow slowly, building on sales & profits...but maybe that isn't a downside at all!
 

Kepler

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Credit cards with 0% APR for one year, if you need cash to put into the company buy stuff with the credit card and a little on a debit card.

then return the stuff and have them put the refund all on the debit card.

then take the cash and put it in your business account.

hope that helps some.
 

lowtek

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Credit cards with 0% APR for one year, if you need cash to put into the company buy stuff with the credit card and a little on a debit card.

then return the stuff and have them put the refund all on the debit card.

then take the cash and put it in your business account.

hope that helps some.
is... is that legal? Sounds like a pretty cool hack
 

Kepler

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is... is that legal? Sounds like a pretty cool hack
Lol one of my friends did it to get $10,000 to start his ecom company.

just make sure the store has a good return policy.

I don’t see why it would be illegal, the lender still gets paid back, and you Still took out credit.
 

Kepler

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Lol one of my friends did it to get $10,000 to start his ecom company.

just make sure the store has a good return policy.

I don’t see why it would be illegal, the lender still gets paid back, and you Still took out credit.
Apple store is an easy place to rack up a big bill with a few items.

if they ask the reason for the return just say your company didn’t receive the funding you were expecting and couldn’t go forward with your expansion.
 

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Necro thread. Closed. Thanks @Kepler
 
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