An intuitive idea and robust infrastructure are required to form the base of a potential start-up. However, this involves a huge amount of funds to keep the plans going & realize your dreams altogether.
A lot of funds are important to upgrade technology, hire the best staff and turn on the overall marketing plan. This will push through a grand entry of the product or service into the market. This way looking for enough funds can fuel the engine of your new venture.
Today, startup ventures are coming up in almost all fields globally, whether it is jewellery or software applications. This is of course implicated despite the risks of losing all the invested money. But with that, every entrepreneur faces different challenges while seeking funds in the form of personal loans. However, it's tedious to convince many to lend you investment.
Common Challenges of Young Professionals for Personal Loan :
Soaring Interest rates-Traditionally, loan funding has been the major source for small entrepreneurs, and it is estimated that over 40% of loans are secured from informal channels where interest rates are at least twice as high when compared to the formal market. With the formalization of the economy, approaching formal sources of finance would benefit to a large extent. Currently, they face considerable challenges which deter them from approaching these sources.
Lack of commitment to building a balance sheet - Traditionally the owners transacted more on a cash basis to avoid taxes and in the process, they never built a balance sheet that could demonstrate the growth in the business over the years.
Lack of collateral to support the loan - Entrepreneurs fail to build personal balance sheets supported by income tax documents, particularly while creating fixed a plan.