Getting a Loan to Start Your Business

Getting a Loan to Start Your Business

Shylock illustrated by Arthur Rackham, 1909

I find designers and copywriters are more confident in starting their own business after earning their stripes in established advertising agencies. Before they tender their resignation papers, they have already started designing their own websites and business cards. They are just counting the days before they can launch their new identity legitimately. I found this entrepreneurial spirit sorely lacking among the account executives, which is such an irony. Account Executives are supposed to be the business authority within the agency and have both the working knowledge and experience in every department; ranging from studio to production to operation to finance. I fail to see how an account executive is “inferior” to his more creative peers in the realm of starting business.

I was at a seminar preview on Saturday and chanced upon a fellow account servicing executive. She said:

“I have calculated and I still feel that it takes too much money to start my own agency.”

“I don’t have enough savings to start a business”

I don’t want to take a loan, I don’t believe in owing people money. Besides, the interest rates are really scary.”

I was surprised, especially for someone who frequented wealth accumulating seminars and count books from Donald Trump, Robert Kiyosaki and Harv Eker among her favorites. The rich and affluent don’t believe that it takes money to make money but they will not hesitate to borrow money if it can yield a favorable return. The classic example of the 20th century has to be Donald Trump. He was down with USD935 million of debt yet he bounced back with billions of bucks within 2 years. It takes more than his masterly deal making skills to do that. His ability to manage his loans played a big part. We might not have the brains of Donald Trump but that should not deter us from incorporating our own business, especially for those who already have experience in marketing and sales.

Peter Drucker famously said “Marketing and innovation are the two chief functions of business. You get paid for creating a customer, which is marketing. And you get paid for creating a new dimension of performance, which is innovation. Everything else is a cost center.”Robert Kiyosaki had also explained the difference between good debts and bad debts. If you write a business plan and you can see a promising future, do not let a lack of money stop you. A lack of money is a problem but then again, problems are but Purposeful Roadblocks Offering Beneficial Lesson to Enhance Metal Strength. You don’t need much money to start up a company. You don’t need much to rent an office space, fix it up and hire a few staff. Your savings, and holding out the hat for some cash advance from loved ones is your safety net for the a couple of month. If you have a more ambitious plan, there are always alternatives.

Yes, I’m talking about getting a loan. I don’t understand why there are people who are still so up-tight about getting loans to start a business. These same people have no qualms to refinance their housing loans for a better interest rates. They can even mortgage their house to buy a second house for investment. Refinancing a loan to enjoy a better term with lower interest is financially sound. Taking a mortgage loan so that you can own a house and rent that house out is also a good investment. So why not invest on a business loan? The logic is the same. In fact, the interest rates being “scary” might just be the impetus, the driving force, that fuel and propel your business to be on a right track.

There’s nothing wrong being an employee as long as you know, and are contented, that your monthly salary is linear. There’s a ceiling to how much an employee can earn. However, there’s no income limit if you are running your own show. Unless you are not interested to call your own shots, stop using no money� as an excuse. There are banks, finance institutions, online lenders to lend you money. There are friends, relatives, colleagues and paid networks for you to leverage on their strength and resources. There are seminars, workshops, books to hone your skills. The ocean is abundant but if you chose not to cast the net, don’t say that there’s no fish inside.

According to an elderly friend who is a financial controller with a blue chip company, getting a loan is no shame. The shame is not servicing the loan when you can. His advice to me, many years back, is still sound for today. He said to:

– seek proper advice on loans by checking on all available sources – banks, finance institutions, online lender

– understand the basic do’s and don’ts on the different type of loans – fixed or variable, long or short terms, secured or unsecured

– do a financial report card on current financial status and expected financial support.

Not all money lenders are like Shylock.


5 Replies to “Getting a Loan to Start Your Business”

  1. Getting a loan is no shame. I’ve often wondered why there is such a disconnect between what people say they want, but what people often do. If we want freedom, why do we pursue a job in essence of the end all and be all. We must start with our thinking and continue with our action plan.

  2. Hi Justin – Perhaps it is due to ego, pride and not wanting to lose face before families and friends. Only when we have a healthy self image and a strong desire to commit to our dreams will we make the often difficult decision to exercise tough action. Otherwise all the positive thinking just nourish our brain. Only positive believing + positive thinking + positive action will get us nearer to our dreams.

  3. I would say the lady was not confident with her own idea. I have some really good ideas and three business plans I would love to move forward with. I actually looked into a loan, but did not make enough money to be able to take out a business loan, and still don’t.

    I have noticed, if people are confident in their potential investment, they will take out a loan full well knowing the return will be there. They will make necessary sacrifices to make it happen.

    Also, one of my struggles is not knowing how to write an effective and efficient business plan to approach Venture Capitalists. Not only that, it is hard to give 70% of the profit to venture capitalists, who only supply the money. I know, “only”, but my personal feeling.

  4. Hi Andrew – Thanks for the visit. Commitment and sacrifices are part of the bargains when we decided to go into business. If something don’t seem right, it is only right to think twice or think thrice. Never mind it is right for others. That’s my opinion. :)

    A friend went to many loans interviews with different banks just to understand the perspectives of the banks so that he can write a comprehensive business plan to get his loan. He managed to get it only after many business plans have been submitted and re-submitted. Getting a VJ’s support might be even tougher. It may not be easy to get into the heads of the VCs unless one is within their network or know somebody in their network. However, if this is the way to go, we just got to be resourceful find that one route to Rome. As long as we are willing to knock, a window or a door will eventually opens. I believe there is a line of light at the end of the shadow. All the best, Andrew.

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