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Obtaining a loan to finance small business

Heatman

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#1
From my experience in life and with starting up any kind of business, capital is the first important variable that must be available at hand before any other steps can be taken towards initiating any business project one have in mind.

With the capital at hand, starting up the business is just a mere wishful thinking which can never be realized. Now there are several ways one can source fund/capital to start a business. It may be from personal savings, grants from family and friends or loans from banks or financial lending agencies.

Having a good business project and plan at hand, where would you consider taking loans from?
 

DGStaff

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#2
From my experience in life and with starting up any kind of business, capital is the first important variable that must be available at hand before any other steps can be taken towards initiating any business project one have in mind.

With the capital at hand, starting up the business is just a mere wishful thinking which can never be realized. Now there are several ways one can source fund/capital to start a business. It may be from personal savings, grants from family and friends or loans from banks or financial lending agencies.

Having a good business project and plan at hand, where would you consider taking loans from?
and this will where they will go wrong from the start; People often start out with no business plan, and almost no money to begin with, and expect to get their online business going with no hard work, and no investment. The days of easy, long-term ranking is long gone, and most people that set up a site never have a solid business plan, nor are they likely to know how much money that they may have to spend on their business now, and in the future, other sites that do manage to move to the next level, may opt to go with angel funding, VC, or other types of investment-related funding, and I am not certain if @DigitalGlobal will be looking for this type of funding, or if he will just go at it by himself, and I am not sure if he knows anything about angel/VC investors.
 

Heatman

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#3
and this will where they will go wrong from the start; People often start out with no business plan, and almost no money to begin with, and expect to get their online business going with no hard work, and no investment. The days of easy, long-term ranking is long gone, and most people that set up a site never have a solid business plan, nor are they likely to know how much money that they may have to spend on their business now, and in the future, other sites that do manage to move to the next level, may opt to go with angel funding, VC, or other types of investment-related funding, and I am not certain if @DigitalGlobal will be looking for this type of funding, or if he will just go at it by himself, and I am not sure if he knows anything about angel/VC investors.
Nothing about starting a business venture is easy no matter how one looks at it. I'm sure it's why some sites end up fading away even when it seems to have had a good business plan, and sometimes these plans does not mean or guarantee success, so when some fails, I just conclude that it's never meant to be.
 
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DGStaff

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#4
Nothing about starting a business venture is easy no matter how one looks at it. I'm sure it's why some sites end up fading away even when it seems to have had a good business plan, and sometimes these plans does not mean or guarantee success, so when some fails, I just conclude that it's never meant to be.
Then there is a business that does succeed that you think should have no succeed by any means. I have seen some seen some sites that appeared to be successful, and I am like "what the hell is this...?" Maybe they had better resources, maybe they hired the right people, as for the business that should have succeeded, and did not, then maybe they did not have enough resources, or maybe they hired all the wrong people, however, there have been some businesses that went from zero to hero, and did not have to do a lot of work to get there, and it does happen from time to time.
 

Heatman

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#5
Then there is a business that does succeed that you think should have no succeed by any means. I have seen some seen some sites that appeared to be successful, and I am like "what the hell is this...?" Maybe they had better resources, maybe they hired the right people, as for the business that should have succeeded, and did not, then maybe they did not have enough resources, or maybe they hired all the wrong people, however, there have been some businesses that went from zero to hero, and did not have to do a lot of work to get there, and it does happen from time to time.
Even with enough resources, skilled hired experts and a good business plan but without a good management skill, there wouldn't be any breakthrough for such business. In as much as it's good to have resources in abundance, a good management skill is one way to ensure the proper use of the resources available to achieve the business goals and objectives.
 
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#6
Even with enough resources, skilled hired experts and a good business plan but without a good management skill, there wouldn't be any breakthrough for such business. In as much as it's good to have resources in abundance, a good management skill is one way to ensure the proper use of the resources available to achieve the business goals and objectives.
Regardless of management and skill, it would be rather difficult for a new business to get a business loan, and some people opt to go another way such as getting investors, and you probably need the right skills in order to find the right investors that believe in your business, and others may choose to go with funding sites similar to gofundme.com and similar sites such as Fundly, Giveforward, and other crowdfunding sites; Not everyone will have access to bank funding since it is so hard to get a loan from a bank, and crowdfunding is just another business funding source.
 

Heatman

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#7
Regardless of management and skill, it would be rather difficult for a new business to get a business loan, and some people opt to go another way such as getting investors, and you probably need the right skills in order to find the right investors that believe in your business, and others may choose to go with funding sites similar to gofundme.com and similar sites such as Fundly, Giveforward, and other crowdfunding sites; Not everyone will have access to bank funding since it is so hard to get a loan from a bank, and crowdfunding is just another business funding source.
I have heard about crowdfunding sites but I haven't tried out anyone yet. Some people can be lucky to get funding from sites. It's true that looking for investors for a new business would be one easy way to fund the business, as banks would require some sort of collateral before giving loans unless it's a microfinance bank. It's only Microfinance banks that give such loans to in order to finance a new business establishment.
 
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#8
I have heard about crowdfunding sites but I haven't tried out anyone yet. Some people can be lucky to get funding from sites. It's true that looking for investors for a new business would be one easy way to fund the business, as banks would require some sort of collateral before giving loans unless it's a microfinance bank. It's only Microfinance banks that give such loans to in order to finance a new business establishment.
In order to get crowdfunding, then you really need something unique, as I have seen some people use crowdfunding, and if you do not really have anything to bring to the table, then your funding will not go that far. I saw one crowdfunding page that was very in-depth and had professionally made graphics, videos, and such, so they knew exactly what they needed to do, and I suspect most that give crowdfunding a shot will fail, and setting up a crowdfunding page is similar to setting up your own site, but on a crowdfunding platform, then you have to promote and market as if you were doing this on your very on site, and if people like what you have to peddle, then they will start funding you, many will try, and few will succeed.
 

Heatman

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#9
In order to get crowdfunding, then you really need something unique, as I have seen some people use crowdfunding, and if you do not really have anything to bring to the table, then your funding will not go that far. I saw one crowdfunding page that was very in-depth and had professionally made graphics, videos, and such, so they knew exactly what they needed to do, and I suspect most that give crowdfunding a shot will fail, and setting up a crowdfunding page is similar to setting up your own site, but on a crowdfunding platform, then you have to promote and market as if you were doing this on your very on site, and if people like what you have to peddle, then they will start funding you, many will try, and few will succeed.
I see, now I understand how getting fund through crowdfunding site works. It's more like working to get investors to take interest in your project and as such likely invest in your work. It doesn't look easy because I know it takes a lot to convince someone to put his money on another person business project. But I believe that everything is down to one's hard-working and determination to succeed by doing a great job.
 
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#10
There are money lending services that are available here in my area. However, I don't support loaning money as a capital for business. Many people here in my province are doing it to have the capital for their rice farming. They aren't doing well because of the high-interest rates of their loans. Their profits only cover their payment for their loans.
 
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#11
I see, now I understand how getting fund through crowdfunding site works. It's more like working to get investors to take interest in your project and as such likely invest in your work. It doesn't look easy because I know it takes a lot to convince someone to put his money on another person business project. But I believe that everything is down to one's hard-working and determination to succeed by doing a great job.
crowdfunding is not a loan, however, you still have to convince people to crowdfund your project, and normally, you would have some type of incentive that you will give the crowdfunder such as a product sample, or sometype of membership if it is membership related or the product itself, and you do not have to pay this money back, however, this is also based on trust, and there have people that started crowdfunding projects just to get the money, and never complete the project knowing good and well they were scamming those that crowdfunded their project.
 

Heatman

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#12
crowdfunding is not a loan, however, you still have to convince people to crowdfund your project, and normally, you would have some type of incentive that you will give the crowdfunder such as a product sample, or sometype of membership if it is membership related or the product itself, and you do not have to pay this money back, however, this is also based on trust, and there have people that started crowdfunding projects just to get the money, and never complete the project knowing good and well they were scamming those that crowdfunded their project.
It's true what you said about people having scam agenda in mind when trying to get investors to crowdfund their business project but only with the intention of doing away with people's money. This singular act is the reason why it's hard to convince people to crowdfund one's project because everyone is now scared of getting scammed by crooks.
 

KellyGeo

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#13
An advice which I would give to anyone looking at getting any kind of loan to finance his or her business would be to always make provisions to pay the loan off as and when due in order to avoid interest pilling up for you, thereby living one in a perpetual debt. Seeking for grants would be my line of action if I'm looking for money to finance a small business project.
 

to7update

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#14
In my country we have something that helps people starting out businesses. Instead of the unemployment benefit paid monthly, people are offered to receive this benefit in full so that it can work as capital to start out a business. I think this is a great measure because people who are out of a job will also have a hard time getting credit.
 
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#15
An advice which I would give to anyone looking at getting any kind of loan to finance his or her business would be to always make provisions to pay the loan off as and when due in order to avoid interest pilling up for you, thereby living one in a perpetual debt. Seeking for grants would be my line of action if I'm looking for money to finance a small business project.
I would not advise getting a loan, and you should find alternate funding methods if you get a loan, and your business should fail, then you are still going to be on the hook for the failed business and the debt that you may or may not be able to pay back, and if you know how to get peoples attention through crowdfunding, then go that route, at least if your business does not make it, then you do not have to pay back any money, and you can also try to get funding on sites such as GoFundMe, but you still need to be able to convice people to fund your account so you can get started.
 

KellyGeo

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#16
I would not advise getting a loan, and you should find alternate funding methods if you get a loan, and your business should fail, then you are still going to be on the hook for the failed business and the debt that you may or may not be able to pay back, and if you know how to get peoples attention through crowdfunding, then go that route, at least if your business does not make it, then you do not have to pay back any money, and you can also try to get funding on sites such as GoFundMe, but you still need to be able to convice people to fund your account so you can get started.
It's true that getting loans comes with a huge risk and the added pressure to always remembering that you have a loan debt to take care of never makes life easier for the individual. So therefore, it's the reason why getting loan should be considered as ones last option.
 

NoviceNinja

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#17
I guess instead of asking for a loan from a bank, how about looking for investors? And the set-up is they get a percentage of the profits once the business makes money. For example, an investor placed $1,000 in your store; he gets 0.05% of all the net earnings (less the expenses). This method might be better as it will make the investors more involved in the business instead of just waiting for their payments. Investors might be a family member, a neighbor, or a friend, not those Venture Capitalists ones. The downside is you don't FULLY own the company anymore, and others have a say in making decisions.
 

KellyGeo

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#18
I guess instead of asking for a loan from a bank, how about looking for investors? And the set-up is they get a percentage of the profits once the business makes money. For example, an investor placed $1,000 in your store; he gets 0.05% of all the net earnings (less the expenses). This method might be better as it will make the investors more involved in the business instead of just waiting for their payments. Investors might be a family member, a neighbor, or a friend, not those Venture Capitalists ones. The downside is you don't FULLY own the company anymore, and others have a say in making decisions.
Getting business investors to back one up in one's business is a good idea, if one is able to get investors that are out to fund your business, you can be rest assured that funds would be the last thing you would need to worry about. But the problem is that it's really very difficult to get good investors that wouldn't be asking for too interest from the business proceeds, which makes you labor too much for others. The only way that you can make use of investors and have peace of mind is should it be an immediate family member or very close friend that decided to be your business investor or partner.
 
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#19
I guess instead of asking for a loan from a bank, how about looking for investors? And the set-up is they get a percentage of the profits once the business makes money. For example, an investor placed $1,000 in your store; he gets 0.05% of all the net earnings (less the expenses). This method might be better as it will make the investors more involved in the business instead of just waiting for their payments. Investors might be a family member, a neighbor, or a friend, not those Venture Capitalists ones. The downside is you don't FULLY own the company anymore, and others have a say in making decisions.
An angel investor may invest anywhere from $25,000 to $100,000 and this can also depend on how much the business is already making, so it is very unlikely that DG would find an angel investor that would be willing to invest into a business that is technically not making any money, in fact, there are probably very few that will invest if there is no actual business up and going, and why would they? not only that, I have not heard anything from DG along the lines that he would even be interested in accepting or seeking any type of investment ie: Angel / VC Investor. It would be easier to find an angel investor to invest because they are using their own personal money, however, when it comes to VC Investing, then you really have to have your business plans together, and I am not talking about business blueprints, VC Investing is more detailed, and more of an involved process, but if you are able to secure a VC Investor, then you could get offers from $50,000 up to 1-2 million dollars. Angel and VC Investors are looking to invest in a business that is going to have huge growth potential, and if this is going to happen, then it will happen down the road, not anytime soon.
 

ahmedo24

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#20
From my experience in life and with starting up any kind of business, capital is the first important variable that must be available at hand before any other steps can be taken towards initiating any business project one have in mind.

With the capital at hand, starting up the business is just a mere wishful thinking which can never be realized. Now there are several ways one can source fund/capital to start a business. It may be from personal savings, grants from family and friends or loans from banks or financial lending agencies.

Having a good business project and plan at hand, where would you consider taking loans from?
It all depends on the nature of the business and how capital intensive it will be. However it also depends in the country you live in, in my location I wouldn't suggest bank loan cos their interest rate is high cos it is a double digits interest. I will prefer getting aids from friends and family and also personal savings then start the business on a small scale.
 
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