Bootstrapping vs. New Business Loans

Document Sample
Bootstrapping vs. New Business Loans Powered By Docstoc
					?It goes without saying that before entering into the business industry, the biggest
challenge that would-be entrepreneurs face is funding. Between investing in our own
business and asking for loan from investors and government agencies such as the
SBA, the most common choice is the latter. Why? Because most likely, people are
afraid of taking risks. Entering the business industry is a risk. Whether you raise your
own capital out of pocket or scout around for available small business loans, there are
calculated risks either way.

Here are some advantages I got as takeaways between bootstrapping and getting new
business loans which I have compiled after reading The Hidden Benefits of
Bootstrapping and the Advantages of a Business Loan:

Bootstrapping: You have an opportunity to be creative so there wouldnt be an issue of
monotony. You have a free rein on how far you want to go because you are not
dictated by another company or person who lent you money. There is also lesser room
for errors because you know it is up to you for your business to be a success and there
is no pressure from other people or other companies.

New Business Loans: You have a lesser liability because if your business would
declare bankruptcy, it would be reflected on your business credit score. By getting a
loan, you may feel emboldened to take on new heights in your business, something
that you would not consider, at least for a while, if you are doing bootstrapping
because of the risks it poses. If your credit standing is good and the economy is doing
well, the loan amount would be greater giving you a wider range of opportunities for
the betterment of your business.

Of course, these are just my $0.02 on the financing options available for entrepreneurs.
On a more personal note, bootstrapping is still the best course of action to take when
youre doing a startup. New business loans could be taken advantage of when you
have established a strong enough client base and a good business credit standing.

				
DOCUMENT INFO