What is the major challenge with getting loan for business

[Justin]

In order to get a business loan, you need two things, one collateral, two a strong business plan. If you cannot convince the bank that you have good collateral and you also have a strong business plan, you will not get loan.

 

[Mostee501]

The collateral aspect of the T&C makes me stay off from the loan agreement. I don't want to see a scenario where by i won't meet up to a loan repayment at the due time. Then my collateral will be used for exchanged for the delayed payment of the loan.

Yeah and you know the collateral always has a high value compared to the loan taken from the commercial banking sectors, and when you can't meet up and your collateral is gone, you would be very sad and disappointed,sometimes i feel the banks use to be happy when someone can't meet up their loans in other to take hold of the person's assets.

 

[joy101]

The major challenge is that people hardly pay back on time, but idea of getting a loan to start a business I don't support that is good save before thinking about to start up a business, is very important to save money before planning at a business.

 

[Sariana23]

In order to get a business loan, you need two things, one collateral, two a strong business plan. If you cannot convince the bank that you have good collateral and you also have a strong business plan, you will not get loan.

I agree with you and I think it is fundamental what you break down "one guarantee and two a solid business plan" without these two it is very difficult for you to get a loan, even if you have a good project in mind. Since the financial entities will have no guarantee of the repayment of such a loan.

 

[Nomad]

When I applied for a bank loan for my business, I was already running my business for sometime, I already had some business infrastructure, I already had registered with local authorities, and my first attempt of getting loan was successful.

 

[Justin]

I would like to add one more thing. You also need a solid repayment plan. You need to convince them that you can repay even if your business does not succeed.

 

[Sariana23]

The major challenge is that people hardly pay back on time, but idea of getting a loan to start a business I don't support that is good save before thinking about to start up a business, is very important to save money before planning at a business.

Thinking about what you say, I have the same opinion, I think that if there is no capital saved, I should start to do it. Personally I am saving for it, I do not want to ask for a bank loan to avoid possible reprisals for non-payment and the increase in interest.

 

[Dowenship]

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

I don't even think getting a loan for a business is a good idea. Although at some point you will need a loan or extra fund which will require u to go for loan but in order for the banks to get the loan back they will have to be strict on the loan. That why people are afraid to get a loan.

 

[Prettyjanie]

I think one of the major challenges in obtaining a loan from the bank is the interest rate. The interest rate is supper high such that I would advice you get a loan else where, maybe from family, friends or any other loan facility where the interest rate is not so high. So as for bank loan, its a no no for me.

 

[FreshKaz11]

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

I don't think there is a better way in the part of the continent we are living when it comes to taking loan. Although I don't blame the bankers much, because they act on what have happened in the past while giving loan out,so they don't want that to repeat itself again that's why the pressure on giving loan is much now.

 

[Sariana23]

I think one of the major challenges in obtaining a loan from the bank is the interest rate. The interest rate is supper high such that I would advice you get a loan else where, maybe from family, friends or any other loan facility where the interest rate is not so high. So as for bank loan, its a no no for me.

We think alike, in my case it's a no too. Although we don't know what may happen in the future, as long as I can save as much as possible and if necessary get the support of friends or family, I will try to avoid such loans from banks or moneylenders.

 

[Adventurer]

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

Yes because of the pressure to repay the loans, I have heard of sad stories where banks collect collaterals when people are unable to return the borrowed money that's why people avoid bank loans like a plague. But if you're sure of your investment you can go ahead. Business is all about risks

 

[Sariana23]

Yes because of the pressure to repay the loans, I have heard of sad stories where banks collect collaterals when people are unable to return the borrowed money that's why people avoid bank loans like a plague. But if you're sure of your investment you can go ahead. Business is all about risks

It is true what you describe, many people have unfortunately lost their assets when the time comes when they cannot meet the commitment to pay the debt. Your suggestion to go ahead if there is security in the investment is a good one, but the risk will always be latent and that is what I do not like.

 

[Alihaider]

Your debt-to-income ratio is also important - the more debt you have, the harder it is to get approval. For new small business loans, lenders prefer a 1.35 loan-to-income ratio.This is especially important if your new business does not yet have a steady cash flow. Some lenders will request a suicide attack.

 

[Eodine]

I myself don't like the idea of collecting financial loans from banking sectors because not being able to repay back the loan in due time,will lead to bad credit history and loss of property (collateral). I would prefer to seek for grants or by different people contributing to the required 3.

True, the stress of financial institution is voluminous and can be stressful especially for those that are just starting a business as banks would keep disturbing if payments fail not withstanding the circumstances.

 

[Sariana23]

Your debt-to-income ratio is also important - the more debt you have, the harder it is to get approval. For new small business loans, lenders prefer a 1.35 loan-to-income ratio.This is especially important if your new business does not yet have a steady cash flow. Some lenders will request a suicide attack.

You are right @Alihaider, and it has hardly been mentioned here. If a loan is requested for a company, the financial entities request a financial statement and it should reflect 0 debts or very low as you reflect, as this will give the lender more security in the repayment of credit if approved.

 

[Good-Person]

I never recommend anyone to borrow loans in order to start a business. This is because you may lose much more than gaining anything. You have to mortgage your property and pay heavy interest on loans. I really do not get why people take loans. If you are taking my property as mortgage, then why shouldn't I rather sell it?

 

[Setho]

Taking a loan to venture a new innovation to an existing business is not bad at all. A lot of people have trouble getting loans because of the high interest rates that is being attached to these loans in the first place. Dome have problems with collateral to give that is considered worthy by the bank.

 

[Mandypaul]

Well for me,i think the major challenge with getting loan for business is if the business you were doing was flourishing and well paid,and suddenly your business start going down,in this case i think is important to get a loan so as to rise up your business,at the same time you have to calculate if you will be able to meet up with the loan u collected,else you will end up going down

 

[Sariana23]

Well for me,i think the major challenge with getting loan for business is if the business you were doing was flourishing and well paid,and suddenly your business start going down,in this case i think is important to get a loan so as to rise up your business,at the same time you have to calculate if you will be able to meet up with the loan u collected,else you will end up going down

Of course, from this point of view, one must be absolutely sure that the business will be maintained with positive results, otherwise it makes no sense to apply for a loan, only to lose everything in the hands of the lender. I hope that I will not need to apply for a loan in the future.