Being an entrepreneur and business owner is not easy if there are many deficiencies and lack of equipment in the mission of expanding the business. Either way, your plans may be disrupted because of insufficient financial capital, knowledge is not used correctly and wrong steps are taken to take action. Many people think that if they want to start a business, they need a large amount of capital. To get a large amount of capital, one needs to borrow or go into debt. In their minds, they are able to run a business and make a profit by going into debt or borrowing because part of the profit will be used to pay off the debt.

It is best if you want to start a business, avoid going into debt or borrowing. If you have strong finances, you won’t have any problem starting your business. In an uncertain situation for those who have assets that cannot necessarily be liquidated either long-term or short-term except for liquid assets placed or deposited in the bank. That means no one can afford to pay it off or buy it. Sacrifices for survival have to overcome in corporate control in structuring the business.

What about those who are not able? There may be some who are capable, but need more money to support their personal and family needs. If this conflict occurs, you may need to borrow money to start a business. Business capital requires a large amount, so the best step is to apply for business financing. One of the things that all entrepreneurs fear is lack of capital. Money is all the solutions that can raise your business again, which can reduce your workload to train employees and so on. In short, a business needs money to start, with additional capital and fixed capital, surely you just wait for the profit after this. But if the business is still stagnant, there are many things you should do to grow your business.

Not every business owner is eligible to apply for business financing – the conditions imposed for each bank or cooperative are different. Typically, conditions apply to:

  • Company location – Your business must be registered in Malaysia and you must reside in the company’s operating area
  • Period of operation – Your company must be in operation for a specified period of time (6 months – 3 years minimum) and demonstrate a business plan that has the potential to succeed
  • Sufficient cash flow – Minimum amount of revenue or sales in a year (for example, minimum revenue of RM500,000 per year)
  • Clean financial record – Most business financiers are not open to bankrupts

When is the right time to take financing in a business? For example you want to open a new branch. From one eatery to several new branches in different locations. You can already estimate how many sales per day in one store, how much the monthly cost is and how much profit you can get. Regular customers are already there, demand is increasing and the brand is well known. There is no problem in applying for financing in this situation. In conclusion, it is not wrong to start a business by taking a loan, but you have to think about the risks as well, be aware that the risk of failure in the business in the initial phase is quite high. Each bank or cooperative provides different services, financing amounts, interest rates and financing periods, but can still help you in running your business. Choose wisely for the future of your business.

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