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Loans Or Savings

Discussion in 'Financing Your Startup' started by eProject, Feb 6, 2016.

  1. eProject

    eProject Entrepreneur

    How did you finance your startup did you take a loan or you had to save some money over some time? Many have been successful through taking loans but others have failed. Most prefer saving some money for their future projects. High interest rates have also made many not to consider loans. But I think one can choose either since one's entrepreneurial skills can determine one's success.

  2. djentre

    djentre Entrepreneur

    I neither used loans nor savings. I simply had a few cds lying around. I burned content onto the cds and sold them on ebay for a good amount of profit. When I got my first payment, I used that to expand further and buy more resources. This was 14 years ago, and it was a lot of fun :)
    Last edited: Feb 8, 2016
  3. briannagodess

    briannagodess Entrepreneur

    I used my own savings to buy some products from a supplier. The good thing is that the platform I use to sell these products is free. So I only have to provide capital for the startup products and not the site. I guess in time, when my products sell more, I'd look into buying my own domain for a site to sell my products. As for now, this can suffice and will work for me.
  4. bria1

    bria1 Entrepreneur

    I financed my first business using family and friends, and savings I had for about two years. I actually never had to get a loan at first and I was able to keep flipping my earnings into more earnings and so on...I never tried for a loan until I tried to put together a big concert to raise money for my business...it was a great fundraiser of sorts.
  5. dyanmarie25

    dyanmarie25 Entrepreneur

    I have never tried taking a loan before. I am afraid I won't be able to pay it off in the future, so I just use all the money I have saved.
  6. Vinaya.Ghimire

    Vinaya.Ghimire Entrepreneur

    I invested in infrastructure building for my business with the money I have saved. After the infrastructure was set up, I applied for loan with the local bank. After I was granted loan, I invested in the business.
  7. bria1

    bria1 Entrepreneur

  8. Federico.Gimeno

    Federico.Gimeno Entrepreneur

    Interesting, may I ask what kind of content did you put in those CD's?
  9. bria1

    bria1 Entrepreneur

    Wow I did not know you can burn content and sell it on Ebay. That is a new one for me...so if I have some type of software that I purchased and it is very popular brand.. it can be sold on Ebay. I thought this could be considered copyright infringement.
  10. ruener79

    ruener79 Entrepreneur

    If I can take out a loan to finance a business venture, I'd probably go for that route. Savings is savings and should not be touched. I'm probably just a scaredy-cat. In my mind, if I have to take out my savings for a business venture, then I'm probably not cut-out for starting a business yet. It will be doubly devastating if you lose your savings and the business doesn't work.
  11. djentre

    djentre Entrepreneur

    I burned games onto these CDs. A friend of mine used to code games - I asked for his games, he gave it to me thinking no one would ever buy them. So, I sold the games and pocketed the profits.
    blenly and Federico.Gimeno like this.
  12. rz3300

    rz3300 Entrepreneur

    Well I consider myself to be very lucky, because I was able to partner with somebody who had significant resources so we were able to get by with very little loans. That said, it was certainly not free money by any means, but it was a little more of a safety net than I was used to. If that were not the case, though, we would have had to depend on loans but we had some good rates in place so it would have been relatively easy to do so.
  13. remnant

    remnant Entrepreneur

    I prefer savings to loans. We are in the era of starting small and ending big. A small business started from savings will cushion the owner from the shock of failure associated with loans. When I start small, I get the requisite experience necessary to sustain business expansion when I acquire a loan. The trick is to be lean and mean.
  14. T J Tutor

    T J Tutor Administrator Entrepreneur

    I would never recommend borrowing money for any project.

    Sometimes, a partner can be a viable option.

    The best way is to generate small projects that can earn some money and then turn that cash into a bigger project. Continue on until you are generating enough for the goal.
    CoolSpot likes this.
  15. CoolSpot

    CoolSpot Entrepreneur

    Funding is the biggest nightmare of any venture I find. But there is a simple way around it.
    Strip your product or service right down to the minimum viable product. Looking at only what you need to get started. If you were going to be working in ecommerce this would be as little as 1 product, an ebay/craigslist/amazon account. you sell the 1 product you have then use that to buy 2 products and so on. Of course with ecommerce you have drop shipping as well which will allow you to have huge product catalogs with no upfront cost, but when you do this you need to make sure you dont get carried away and keep things small while you iron out the bugs (and there will be plenty of them when you start to drop ship for the first time)
  16. Trixen

    Trixen Entrepreneur

    I don't resort to borrowing unless I am very certain that I can pay within the term. You also have to consider the interests incurred. It could affect your profits especially if you don't monitor your payments properly. Every time I buy stocks I try to pay in cash. Slow but sure. And yes, it's better to have partners.
    T J Tutor likes this.
  17. Kaia

    Kaia Entrepreneur

    I self-funded most of my first business. I used the money from my job to buy what I needed. I also took out a microloan. I was a part of six week business program. The goal of the program was to help you complete a business plan and apply for a microloan if needed. I completed the program and received a microloan. I really didn't need the loan, but I wanted to start establishing credit as a business. I successfully repaid the loan, but I never needed another one.
    T J Tutor likes this.
  18. Pablo Diaz

    Pablo Diaz Entrepreneur

    I've always advocated that loans are definitely not the way to go. There are very few cases in which taking a loan is the best option. Now, I know that you don’t want to hear this but if you don’t have any other choice and you truly believe in your business – then why not use your own assets or cash to get that business off the ground and making money? If you considered taking a loan, you want a bank or lender to take a risk on you but you won’t take a risk on yourself? It just does not seem fair.

    Plus, I can guarantee you this: If you have your own assets at risk you will work harder and longer to make sure your business does succeed (which is the end goal anyways).
  19. onlinecashcity

    onlinecashcity Entrepreneur

    I'd be afraid to take a loan. Once I start upping my idea (really just projects to make money off of, not an actual business) I'll use my own money. I'd be afraid that if I took a loan, things won't work out, and I'll have to pay it back!
  20. harryblossom0

    harryblossom0 Entrepreneur

    Every Business is well planned and running it smoothly entrepreneur need funds. Loan or Saving these methods are followed by entrepreneur to raise funds both are good approach because a person with low in earning not able to save enough money to start a business for such individuals loan is good option.

    Before starting any business it is important to have good plan with all aspects. Be confidant and well prepared to implement things correctly. Step by step starting approach is always good to get familiarity about real business scenarios. When you get experienced in your business sector then move on next steps.

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