Business Foundations · Practical questions
Should I borrow money to start a business or start small?
That depends on household finances, the business model, available savings, and whether customers have demonstrated demand. Borrowing can accelerate a viable business, but creates payment obligations before revenue is dependable.
Understand what the loan would actually accomplish
Borrowing for equipment required to complete profitable work is different from borrowing to cover an untested idea’s recurring losses. Identify the purchase, its useful life, and how it could help produce revenue. Compare that with a smaller version of the business.
Test the downside, not only the best case
Estimate monthly payments and what happens if sales arrive later than expected. Consider existing personal debt, family expenses, and emergency reserves. Avoid using optimistic revenue forecasts as though they are guaranteed cash.
Look for staged alternatives
Could you rent equipment, buy used, start part-time, pre-sell a service, or delay optional spending? Sometimes a modest pilot teaches you more than a large initial investment. A lender or qualified financial adviser can help review the terms and risks of specific financing.
A question worth asking yourself
If sales were half of what you hope for during the first six months, could you still make the payments?
You don't need to solve everything today. The free NTA Business Growth Guide helps you work through your own circumstances, one question at a time, using lessons shaped by Rick Hesse's nearly 50 years in business.
Continue with the free planning guideMore questions about starting a business
How do I know if my business idea is worth pursuing?
Can I start a business while keeping my full-time job?
How much money do I need to start a small business?
How do I start a business with little experience running one?