WHAT ARE THE DISADVANTAGES OF GETTING FINANCE FROM BANKS?
if you need to raise finance for your business, banks will often be your first port of call. But, there are a number of disadvantages of getting finance in this way, as you’ll see below.
Banks are notoriously difficult to secure finance from, especially if you’re a small start-up business. They often need to see security before they offer loans, overdrafts and the like, which many start-ups can’t offer. They’re also highly unlikely to offer funding if your business idea is thought of as unusual and, in their eyes, risky. If you’ve got a particularly unique idea, you may want to steer clear of them.
Even if you do manage to get a loan from them, it will be subject to interest and strict repayment schedules. This means that unless your business takes off straight away, you can become unstuck and will often find yourself repaying the loan with what’s left of it. This puts you at an inherent disadvantage.
Banks also rarely offer you the level of help and support that you can find if you raise capital elsewhere. They may offer you a “business mentor”, but they invariably won’t have the level of expertise that you need and can’t provide the amount of time and support that a business needs to be successful. Besides, if they’re provided by the bank then they’ll have the banks interests at heart rather than your own, which won’t do much for your business.
By far the best way to raise finance is to source it through private investors instead. They can offer a higher level of financing, can give you a great deal of support to make sure your business succeeds, and can bring a level of expertise that you can’t find in banks.
With so many disadvantages of getting finance from banks, why even waste your time considering them?
About the Author:One of the best websites in this regard is entrepreneurinvestornetwork.com.au, which aims at uniting angel investors looking for business investments in Australia with budding entrepreneurs in the country.Log on to the website today. You will not be disappointed.
Article Source: ArticlesBase.com - WHAT ARE THE DISADVANTAGES OF GETTING FINANCE FROM BANKS?