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From family members and friends because you have nothing to pay above on loan amount instead if you go directly bank for loan then you are bound to pay intrest to bank against loan amount.
Also bank demand some securities against loan amount
I believe the wise decesion is to go for the bank even though you have to pay the interest becasue the project will be more valuable and the profitibilty of the business will be somehow approved by the experts in the bank
From the bank, because it know the project effciency more than your family, and when a bank give you a loan the value of your company increase, even if, you pay bank interest and you give guarantee.
Agreed on both Nadjib and Lamine's answer.
Also ask yourself the following question:
If the business fails (we all hope it doesn't), who will it be the most difficult to try to explain and to pay back the money? The bank or your Family
First thing I would do is i will go for equity financing i will sell my shares in market to raise money. If my family at least six months living expenses i would go for family At last i will go for banks
Go directly to the bank because it will make you to have presure and push you to work harder to repay the loan. Besides, You will be very much cost effect and shall be able to give proper accountability of the business as in the accounting equation which states that Assets= Owner Equity+capital. In this case the capital is the loan from bank. Getting a loan from the bank will also help to know if the business will be profitable or not because the bank will analyse the business profitability in the nearest future before granting you the loan.
In the initial stage of a business too difficult to convince your bank to avail loans. So my opinion to find external short term funds like family or friends would be better and easy. after one or two years operations usually banks will show confidence in you to provide loans. By then we will close the external funds immediately.
Starting a new business is not only risky but is very challenging, which is why banks are sceptical in offering loans to any business that does not have a trading history and a consistent cash-flow, in most cases audited financial statements, cash-flow statements, business insurance (covenants) are a prerequisite for business financing, loans from family members can be beneficial for people with little or no collateral, a bad credit rating and no prior business experience. Even if that was not the case, a loan from a bank will come with high interest due to the high risk nature of funding a startup, meaning that as a new business owner you will divert some of your cash-flow towards servicing the debt interest payments which will make it difficult for you to generate a decent profit.
Go for the Bank Finance which will apply all commercials lending principles and can sustain for a long run and will be more flexible over the long run to support your business in true commercial sence. Apart from meeting your other requirements of non fund based lending which can only be accepted in international business like Bank Guarantees , Letter of Credit etc., . Personal finance cannot provide such flixibility and international trade facilities.
I choose for loan from the bank with the soft installment, we can estimated between income and expense base on our planning income from our business, also bank can do analyze from our company profile about our purpose business,also goal income of that business
From family members because no need to pay extra interest. If we took loan from bank need to give some guarantee
