What is the major challenge with getting loan for business

[chicnthin]

I, for one is not comfortable with taking loans from banks, be it for personal purposes or business. The interest alone is a lot and the collateral, which I find scary to lose if ever I failed to pay.I'd rather ask from friends, family or relatives than go to a bank with rules that's strict.

 

[Gilead]

Fact is,if you conduct your feasibility study well enough and its a very positive result you got from it, then there shouldn't be any reason to be afraid. But i will never advice anyone with no big guarantee take up a loan.

 

[giddy]

Many lenders will want to see a bigger picture of your business health than just credit scores and cash flow. They’ll want your business planso they can see where you’re headed. They may want tax returns for the past few years. And be prepared to show any other outstanding debts you currently have on your balance sheets.

 

[Lyrrex]

I personally does not support getting a loan to start business although it might be difficult to start a business without a capital but yet if you are really serious to start up a business then you should try as much as possible to raise your own capital because getting a loan to start up a business can be risky that if for example the business fail or collapse you are at risk of going to jail.

 

[Damismiling]

Loans from Banks requires a lot of documentation and tedious processes, the request for so many things including collateral, also bank statement and other company official documents. One other thing in which people are afraid of is prosecution in case of failure to repay back, which can land people in jail

 

[BrolySSJ]

Most people hardly feel comfortable with securing loans from banks as they feel it puts pressure on them due to the collateral attached . Are there no better ways to tackle this issue of being afraid to secure loans

Personally I don't think so. It is natural to have collateral on a loan because it ensures that if you are unable to pay back the loan that the loaning company is able to get something as compensation because the risk to them is very high as well when they loan you the money. I think that to reduce fear the simplest and best thing to do is likely going to be to try and make sure that you have more of a solid business plan. This will create confidence and remove your fear to a large extent.

 

[Josemendez]

Personally I don't think so. It is natural to have collateral on a loan because it ensures that if you are unable to pay back the loan that the loaning company is able to get something as compensation because the risk to them is very high as well when they loan you the money. I think that to reduce fear the simplest and best thing to do is likely going to be to try and make sure that you have more of a solid business plan. This will create confidence and remove your fear to a large extent.

Before someone secures a loan ,it is obvious he is convinced with the business plan ,and willing to risk the collateral , however they might come an opportunity to take calculated risks that will make the business grow faster than expected , the person may prefer to follow the gradual process because of fear of losing out the collateral.

 

[BrolySSJ]

Before someone secures a loan ,it is obvious he is convinced with the business plan ,and willing to risk the collateral , however they might come an opportunity to take calculated risks that will make the business grow faster than expected , the person may prefer to follow the gradual process because of fear of losing out the collateral.

When opportunities come along it is good to be able to seize them and in that case it would make sense to put up more on the loan to try and take advantage of it, however you should always be sure that you are comfortable with the risk that you are taking. For example sometimes it is best to be happy with what you have, even if you miss an opportunity but you continue to save so that you don't have to take out a loan and who knows maybe a better opportunity may come up in the future. It is as much about self restraint as it is about risk management.

 

[Life drama]

There are many challenges in taking a loan,but the biggest challenges facing a small buisness is collateral or insufficient credit card.other challenges are high interest from bank loan,low market income and market fluctuations.

 

[Highflyer]

• Lack of cash flow. Managing cash flow is a perpetual struggle for most business owners. ...
• Sticking to a budget. Another common business challenge is budgeting. ...
• Marketing. ...
• Lack of capital. ...
• Unforeseen expenses. ...
• Be aware of these eight roadblocks that can keep you from getting approved for a small business loan.
  • Poor credit history. ...
  • Limited cash flow. ...
  • Lack of a solid business plan. ...
  • Too many loan applications. ...
  • Disorganization. ...
  • Failure to seek expert advice. ...
  • Failure to shop around. ...
  • Apathy.

 

[Janita]

Reach out to your vendors and suppliers to see if they offer 30-day payment terms on the supplies or merchandise you purchase from them. Although it’s not a small business loan.Look into a business credit card. Many business credit cards are a little easier to qualify for than a small business loan, so they can be a potentially good way to start building a business credit profile.

 

[Kennysplash]

I believe banks are the best option, unless you have a rich family member. But if your business is a little advanced then you can try crowdfunding, but bank is the best.

Most people hardly feel comfortable with securing loans from banks as they feel it puts pressure on them due to the collateral attached . Are there no better ways to tackle this issue of being afraid to secure loans

 

[Josemendez]

I believe banks are the best option, unless you have a rich family member. But if your business is a little advanced then you can try crowdfunding, but bank is the best.

I don't think that bank should be the best method , considering their high percentage charge ,and their policy if not giving an extension upon the expiration of the agreed period.
With family or individual , you can get an extension .

 

[Khezo]

I guess the major challenge is the way to pay bank the loan and the interests on top those loans. Interest most times weaken a lot of people. How would I acquire a loan of 39k and have to pay back 59k that's sick

 

[tuna89]

Securing a loan is never an easy task especially when it is a large amount of loans, interest rates and collateral presentation discourages individuals, i always discourage friends from taking interest loans, better to take interest free loans to prevent any burdens, also one should have a bank account with lots of heavy transactions, this will confirm your status as one who is worthy of loans.

 

[Nicklas22]

Lack of collateral: Collateral is personal or business property ranging from real estate to equipment. It’s required for secured business loans, including many Small Business Administration (SBA) loans, as it serves as a secondary form of payment for a loan in the event of loan default. But new business owners who don’t yet have business infrastructure may have to use their personal home as collateral, which can be risky.

 

[Mawome]

The major challenges with getting a loan from bank are: no.1 you don't easily get a guarantor that will sign for you, no. 2 borrowing money is too risky, cos you may borrow today and promise to pay back next year, or you may invest wrongly on a business, that's the worst thing that can happen to a business man.

 

[Jonaville]

I will not advise anybody to take up a loan especially if he is just starting the business. It usually becomes difficult when it is time to repay the loan and if he's not careful the business can crash before it even started. He should try other means of obtaining capital taking up a load should be the last option.

 

[Ojonuyo]

I am amazed by certain person reply on this, personally, it is not advisable to take loan from the bank. I will tell you why; taking a loan offer from a bank is a 50/50 chances, if you're not able to pay back, the property you used as collateral will be taken. Secondly, you get to pay back that loan with much interest on it, so you see either side of the coin is not advisable.

 

[Thosynho]

Most people hardly feel comfortable with securing loans from banks as they feel it puts pressure on them due to the collateral attached . Are there no better ways to tackle this issue of being afraid to secure loans

One of the major challenges in getting loans especially from banks for business in this clime is the problem of providing collateral for exchange of loans. The collateral banks most request for is not easy to get and this left entrepreneurs frustrated.