When it comes to spearheading a new business venture, the first thing you’ll be needing is an excellent idea. However, that alone won’t be enough to make things happen. Barring an exception or two, chances are you’re going to need capital to make things work. That brings up the question, however, of how much you really need to get started. When you think about it, you don’t really need that much, but it wouldn’t hurt to have more, right?
This is the main reason why individuals go for loans to try to get their business off the ground. They might receive more than what they need, which they might think is a good problem to have. While more money would certainly allow for more opportunities, if you don’t know how to take them or where to take your business with that money, it ends up being an issue down the line.
Microfinance as a viable option.
While the big loan will always be an option for those who are eligible, upstarts just might find more results by going for microfinance options instead. The goal of Sharone Perlstein, one of the premier experts in microfinance, is to expand microfinance in developing countries. He’s done a lot of good work and has yielded surprising results. His website shows that individuals who go for microloans have an overall repayment rate that is almost 99%. This is a very telling study and one that showcases the biggest advantage that microfinance has – flexibility.
Utilizing flexibility.
When it comes to big loans, you’re left with a similarly large interest rate. While this isn’t necessarily an issue straight away, if you don’t know how to take advantage of the infusion of funds, you could end up making things worse for your startup. It’s something that has happened all too often, and microfinance alleviates this by giving less, which ends up giving young entrepreneurs an easier time down the line. You might not have as many resources, but you also won’t need to worry about inflated interest.
You’ll be able to concentrate on what makes your company great, rather than having to focus on paying your debts. It isn’t a complete guarantee that your business will be a success, but it’s something that gives far more when you consider the overall lack of risk. Compared to a larger loan, there’s very little risk at all with a microloan.
To conclude, it isn’t necessarily capital that gives a startup business success. Instead, it’s being clever and efficient about the money that you pour into your business. You might end up needing more money down the line but as a startup you could stand to benefit more from what microfinancing can offer. Why not give it a try and see for yourself just what a microloan can do for your business?
