‘Absolutely no idea which one to go with the loan, borrow or investment’ is one of the most common queries people have when coming up with the idea of starting a new business. Same was my problem or let say query, when I thought of starting my own business. Not knowing about the technicalities is a major drawback if you want to start something new, trust me! Talking to people who have gone through the same scenario helps a lot. The information I got through those conversations will be definitely given.
The first question to be answered what is a loan, borrow and investment?
After talking to people from different business fields for their expertise, one thing was very clear that different people have different suggestions to give hence a few are
“Business requires funds to meet the expenses incurred in it which can be paying salary to the employees or business expansion expenses until their new company gets off the ground. Businesses with good growth rate can choose to take the loan from banks at interest rates which they feel is manageable for them. It is preferable always to be professional to impress the lender or else they may decline the loan application” was the answer I got by a person according to whom loan is the best way to fund your business
“Borrowed capital can be said funds acquired from either individuals or institutions. It can be used to increase their potential investment returns also known as leverage; it can also be used in businesses as loans or even debentures in technical terms called loan capital. It can also be used to trade currencies although it is considered a little dangerous but with certain precautions it is best used to achieve goals of the investors.” Was another suggestion given by another person.
“Investment can be in easy terms said as the money that people put in your business with the aim of getting return for them. Crowd funding can be said as an example of Investment where people invest money in your business if they find it appealing through platforms that provide the means through which your business is funded.” Was another answer I got from others. The second question that rose in my mind was
Which one to choose from the three?
After going through the all the suggestions one thing was clear each type of business funding has its own pros and cons and one has to look carefully into all aspects in order to make the correct choice Aspects like
• Which business line has been chosen
• Time taken to come off the ground
• Returns getting from the running Has to be taken into consideration before arriving at a firm decision
Conclusion: - In the business world, everyone is paid in two coins cash and experience and is well said. Make sure that the decision of the method chosen gives you both cash as well as experience.
About the Author:-
Lokesh Sharma is working as Marketing Manager at QuickCompany.in a leading website for Company Registration Online in India.