1.Business loan is an expense to the company
Most business loans are given at high interest rate. When making the repayments, you are required to pay a portion of the principle plus interest and this can increase your monthly expenditure by a huge margin. Further, small business loans have shorter grace period. This implies that you are required to start repaying the loan a few months after getting it. The business takes time to generate cash-flow, thus you might not have money by the end of two month grace period but the bank expects you to make a payment. Hence, the high interest rate and shorter grace period is the number one reason to avoid starting your business with a bank loan.
