Starting up a new business and you require funds? There are two options available to finance your business one is a business loan from banks and NBFCs and another is a private investment. Now which one option to choose is a difficult question which every businessman face.
So, let's discuss the merits and demerits of taking a business loan from a financial institution and private investment. If your business is new then opting for private investment is a better option as along with investment you can seek their expert advice as and when required for running your business. Additionally, they are a good source to build new business connections. The demerit of going for a private investment is that you may lose control over your business and also investors are entitled to get business profits, which otherwise could be reinvested in your company. The second option of financing your business is taking a business loan. If you are taking a business loan then there is no fear to lose control over your business unlike in the case of private investment. Also, banks are not entitled to get profits which can be utilized for reinvestment in the business. You can choose any type of investment depending upon your fund requirement. You can take the help of a financial advisor as well.
So, let's discuss the merits and demerits of taking a business loan from a financial institution and private investment. If your business is new then opting for private investment is a better option as along with investment you can seek their expert advice as and when required for running your business. Additionally, they are a good source to build new business connections. The demerit of going for a private investment is that you may lose control over your business and also investors are entitled to get business profits, which otherwise could be reinvested in your company. The second option of financing your business is taking a business loan. If you are taking a business loan then there is no fear to lose control over your business unlike in the case of private investment. Also, banks are not entitled to get profits which can be utilized for reinvestment in the business. You can choose any type of investment depending upon your fund requirement. You can take the help of a financial advisor as well.
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