Is longevity assured?
Always think long term. Do not just take loans for immediate needs with little impact on future needs. Is your business sustainable enough to have longevity, in order to not only pay back the loan, but also build from the loan?
Once you get the loan, it does not end there. You get it and then you build on it, so you can sustain your business further. Your business should be able to stand on its own two feet for a while after that.
Suzie Wokabi, Founder of SuzieBeauty
Are you the sole owner?
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A big question you should ask is whether you are the sole owner of the business or not, and linked to that is whether you are the main decision maker. If not, then you would be carrying the risk burden alone and potentially putting your personal property at great risk.
I have seen entrepreneurs lose a lot this way. Either way there is a lot of risk, but it is multiplied many more times if you are not the sole owner and/or you are not the main decision maker.
The other owners/decision makers will have less to lose and may not make as careful decisions or put in the necessary work to grow the business to the point where it can comfortably repay the loan. I am a firm believer in shared burden, shared commitment, shared benefit.
Wandia Gichuru, CEO of Vivo Woman
Will the returns be higher than the cost of the loan?
Will the return on investment on the money you are borrowing be more than the cost of the loan?
If you are, for instance, paying 20 percent interest on the loan, the return on investment must be higher than that, otherwise you will lose.
This means putting in a lot of work in the business and also shopping for the lowest interest loans
Manyara Kirago, founder of Financial Counseling
