How To Start A Business Without Cash Capital

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Getting a loan from family and friends

Next, we asked Brooks about small business loans she likes. Of course, not everyone will qualify with a financial institution, which is why Brooks brought up getting a loan from family or friends. She knows many entrepreneurs who did this. “To them, that was the safest bet; they would rather be indebted to their family and close friend than be at the mercy of the banks and other financial institutions…One of the reasons people opt for this type of loan is the low-risk and low-interest rate. Although, some families and friends prefer to have the loan in writing. Some others will have a fixed date in mind with probably the same amount or a little bit above what was borrowed in the first place. All in all, it is a safe place to get loans. But, it is based on the trust the family and friends have in you, the business owner. The fact that it doesn’t have as many risks and interest as other types of loans does not mean you should not redeem the date.”