Shall I borrow from a bank or a friend when starting my business?
Entrepreneur Samuel Ogunyomi gives his insight on how to borrow money when starting up your own business.
“Is it better to get a loan from the bank or someone you know?” – Kate
That’s a great question! My answer to that is that it is really about who will give you the best deal.
For example, you could go to the bank rather than someone you know because that way you won’t have the personal pressure if you can’t pay them back when promised.
However, on the flipside, if you get money from a friend, perhaps you won’t be charged any interest which is great for a new business as saving costs where you can will be important.
One option to consider is perhaps rather than getting a loan from a friend, they could perhaps invest that money in your business for a small percentage of the business itself?
If they were always going to lend you the money, it also means that they believe in you and that way, when you succeed, they are able to benefit from your success too! Either way, you won’t have had to borrow any money.
- Go to Money Advice Service for free and impartial money advice.