I know that majority of small businesses today are run by loans collected from various sources, but in this article, I am going to give you the reasons why you should not collect loans to start a small business.
What is a loan?
A loan is money given to another individual or party in exchange for repaying the loan principal amount with interest.
Before any money is advanced, the loan terms must be agreed upon by each party.
Loans are usually secured by a guarantor, who is capable of repaying such; as the person loaned default, or collateral such as a mortgage.
Where to get loans.
Loans are generally granted by banks, especially microfinance banks. However, there are wealthy people in society who are capable of offering loans to people.
What is a small business?
A small business may be defined as a privately owned corporation, partnership, or sole proprietorship that has fewer, and sometimes no employees.
Small businesses are also usually known to generate less annual revenue than a corporation, company, or big business.
So if you are planning on starting a small business with money collected as a loan; make sure you finish reading this article.