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Business Loan v/s Liquidating Your Savings

It is always been a doubt in many minds on whether to make use of personal savings or a business loan for business requirements. This article ...<br>we have more information visit on :<br>https://financebuddha.com/blog/first-time-business-loans-what-you-should-know<br>business loan:http://financebuddha.com/business-loan<br>To know more information loans:http://financebuddha.com

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Business Loan v/s Liquidating Your Savings

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  1. Business Loan v/s Liquidating Your Savings BUSINESS LOANS

  2. Business Loan v/s Liquidating Your Savings

  3. While spending your money, earn returns on your savings: • It is advisable to make use of a business loan to invest into your business rather than pulling out all your savings. The main advantage of this is while you are spending you money and paying interest on one side, the other side you will be earning interest or returns for your savings. These saving can be made use in case of emergency situation both personally or business related. • It isn’t a smart choice to risk everything you have at the initial stages: • Don’t exhaust all your savings at the initial stages. Being an entrepreneur is not as easy as you might think about it.  It usually takes makes year to break even on your business and to start making profit. Initial stage of business is where most of the funding is required. This will include towards working capital, equipment, infrastructure set up, stock, materials, approval charges and licensing.

  4. Save money for hard times: • All business has its own share of risk. So while starting any business you should be prepared mentally and financially to do the necessary in times of hardship. Contingencies can happen anytime, these are never expected, and thus having savings kept aside for these contingencies will help you to run the show without affecting the business. There could be some natural calamities, accident in the business that could affect long term or to think of the worst, the business might fail. • Don’t empty saving when there are alternatives available: • When there are easy options to get loans and other alternatives to invest into business, don’t make use and empty your savings. There are many lenders out there in the market who are keen to assist you with funding if you have a good rating and if the business plan is appealing. Always make sure that a business amount of your investment is through banks and fund lenders instead of your savings

  5. Investment is not just about money: • While making use of your savings can only give you money required for funding your business, venture capitalists and other types of lenders can offer something more. Getting good contacts with professionals is always an added advantage for everyone. Having right contacts will open up a lot of business opportunities for you especially when you are new to this field. • It is even a good option of considering – wherein 50% of your investment to business is through loans and similar sources and the rest half is through your personal savings. Apart from all these make a thorough research on your business types, success rate, market in which your business is going to function and so on. Last but not least, make use of your savings only if you are confident that you can take back all your savings from your business within 2 years.

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