Is bank loan with a good interest good or not recommended to build a startup ? When does a loan make sense and when it doesn't ?

asked Feb 11 '10 at 00:46

T%20K's gravatar image

T K
635


  1. Firstly, a bank loan is pretty much always connected to an interest rate and a fixed date that you have to pay it back. Not being able to pay back the amount might get you in trouble or force you to apply for a second loan to be able to pay the first one back (if you get the second loan at all since your credit score will be lower now).

  2. Secondly, a bank usually doesn't care much about your business, income projections or the situation you're in. You gotta pay them when you gotta pay them, whatever may come.

  3. Thirdly, building a startup with a bank loan makes sense if you only want and need the money. If you're, as you said, able to get one with a good interest rate then it'd solve your problem.

  4. What doesn't come with the bank loan is advice and experience, you get that only from a VC or a business angel and at times that can be much more helpful to your business than getting your banker to give you cash in your hand with no questions asked.

  5. Involving a VC or a business angel will often times open doors to other potential business angels and investors as they're well-connected.

  6. Business angels have a personal interest in their investments succeeding, so they'll have a closer look at what your doing and they will get involved if necessary. A bank only has a closer look at the date that you have to pay them back.

  7. If you can't find a VC or business angel offering you equity for shares then try finding a business angel offering you a loan + advice, help & support (they usually still want a share in your company). I've been offered such deals (and rejected them because interest is Haram) so maybe you should give it a go and contact your local business angel network.

  8. Depending on the country that you're in you might also want to check out governmental projects. Many countries offer loans at good interest rates, especially for entrepreneurs. In addition to that they also support you find office space, going through legal hassles, connecting you to like-minded people in your industry, give you discounts on certain conferences etc..

answered Feb 11 '10 at 17:28

Rias%20A.%20Sherzad's gravatar image

Rias A. Sherzad
3096

Android Tablet 9.7 Your blog is so beautiful and natural all are like your blog everyone appreciate your blog.Thank you for your sharing.newfreeshipping.com tablet pc wholesale Your blog is so beautiful and natural all are like your blog everyone appreciate your blog.Thank you for your sharing.newfreeshipping.com

answered May 09 at 03:27

wolf_god's gravatar image

wolf_god
1

It is nice that you posted something like this JXD S7100 and I am quite lucky to read it. Thanks for posting this!

answered May 10 at 22:00

boardaaa's gravatar image

boardaaa
1

Thank you for sharing articles, I learned a lot, you can often tell your blog to recommend to you an online shop selling electronic products - www. Newfreeshipping.com Earphone for iPod Nano Lanyard Earphone for IPod Nano

answered May 14 at 02:58

newfreeshipping's gravatar image

newfreeshipping
1

Your answer
toggle preview

2010 © YallaStartup, Inc - About

Creative Commons License
Licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License