By Jerry Mooney

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You want to start a business, but you’re not confident with the amount of money you have. For many in this position, getting a business loan seems like the obvious answer. But it’s not always quite as clear-cut as that.

Getting on with it

The most important thing do you to do is to get on with it as best as you can. Just because you’re unable to acquire a large amount of capital, it doesn’t mean you should just give up. A lot of people make the mistake of not proceeding with their business because they couldn’t get some sort of investment or loan.

But you should do as much as you can to get your business going without the large capital amount you were hoping for. In fact, starting a business without capital is an underestimated path where all businesses are concerned. I think you should give this a try even if you can get your hands on the money. It may clue you in on the potential of this business before you start investing real money in the venture.

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Doing the research

Of course, starting a business without capital isn’t ideal. You may find yourself running into a lot of problems. If you want your business to reach more of a medium size, then you might be better off looking into loans.

But before you go into this territory, you need to do thorough research. At the end of the day, any loan is going to be somewhat of a risk. But the type of loan you go for will help determine the amount of risk you take on. Your business may be suited for some loan types, but not others. The best place to start may be with understanding the term of a business loan.

How much you need

For most people, the question isn’t really do I need a loan to start this business?. The more pressing question is how much do I need to borrow to start this business?. Going into any business venture without some kind of monetary cushion isn’t really recommended. It can be done, but you may be making things so much harder for yourself.

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Some will tell you that you should try to borrow as much money as possible. Others will tell you that you should borrow as little as you think you can begin with, realistically. The truth is that everyone’s circumstances are different because every business is different! Assessing how much you need to borrow isn’t an easy task, but it’s an essential one.

Alternatives

The easiest answer to the question “Do I need a loan to start my business?” is “it depends”. It may be the best solution for you, but it could depend on what you’ve tried first.

Have you tried to gain investment from another party? This could be an individual or a group with a lot of money who are interested in your idea. You could even look into online crowdfunding. But for most people, it’s easier to look into business loans. Just don’t rush into the process thinking it’s the only way you can possibly succeed.

Jerry Mooney is co-founder and managing editor of Zenruption and the author of History Yoghurt and the Moon. He studied at the University of Munich and Lewis and Clark College where he received his BA in International Affairs and West European Studies. He has recently taught Language and Communications at a small, private college and owned various businesses, including an investment company. Jerry is committed to zenrupting the forces that block social, political and economic justice. He can also be found on Twitter @JerryMooney