Post
Topic
Board Economics
Re: Would you prefer getting a loan for a startup or getting an investor?
by
Franctoshi
on 23/01/2025, 16:40:53 UTC
One of the major problem an average person that has an incredible business idea faces is the ability to raise the initial capital that's required to bring his ideas to life. and in solving this challenge, the available option has always ranged from iether taking a loan from a financial institution or seeking for investors that will take a particular percentage of the company and will in return provide the necessary financial support.

Considering these two options that's one of the easiest to get, taking a loan sometimes comes with a whole lot of strict terms and conditions and  with the high interest rate expecially in my region, it's even deficult to put that as an option. Looking at the case with most investors who are just looking for ways to double there already dormant funds, and care little about the owner of the business, it seems to be another problem dealing with them as most of the ratio they intend getting from you seems to be too big expecially when they already know that your proposed business have an higher chance of doing well in the long run.

I know that as a start-up, these sources could potentially help your business to upscale at a very sharp pace and that from the angle of allowing an investor to buy into your business, you could get other added advantage like getting advice and connection that will help boost your business but I'm just curious to ask;

 If you have a well thought out business idea but don't have the needed capital to keep it functional, is getting a loan the best option or looking for interested investors?

Would trying to start up the business in your own little way the best option or can you consider bringing a third party into the business who will just serve as a partner that contributes just money?
I can't say category which one is better or the one I will choose, but my choice would be base on the nature of the business I'm going to do, that is, if the business has high profit potential within a short period of time, where the chances of you meeting up the loans terms and paying back on time is there, then I will go for taking a loan to start up the business, but in a situation where the profit is not something that is going to be that huge or start profiting as fast, Then I choose an investor whom will have patient with the process of my business growth, and until we start realising huge gains.