5 Challenges You May Experience While Taking A Business Loan

December 19, 2022

5 Challenges You May Experience While Taking A Business Loan


5 Challenges You May Experience While Taking A Business Loan

Setting up a business is always formidable & tough.

Every entrepreneur one or the other time comes across hate & negativity from the people around, who think they will go in loss if they seek their entrepreneurial goals in India.

Multiple small businesses in India start with tremendous potential. They are talented, proactive, dynamic and innovative. Unfortunately, many small businesses fall within the initial years due to economic difficulties. There are many certified financial advisors who can efficiently help you with all the challenges.

Here are five common difficulties that young entrepreneurs face while availing of a business loan.

Challenge 1: It’s tough to prove that you have enough funding to compensate for your loan

Lenders want to make sure that your firm is competent in reimbursing loans. The very first question lenders ask is whether your business is competent in making each recurring payment. If your business does not satisfy its earnings or cash flow needs, your loan is doubtful to be approved.

Challenge 2: High-interest rates

Many times, the interest rates on loans are excessively high, posing a notable challenge for entrepreneurs. Therefore, by picking MSME loans, the interest rate can be lower than the long-term interest. Interest rates are an influential source of concern for businessmen for getting a business loan.

Challenge 3: Long procedure

Your firm is in need of money, and you require immediate money to seal the void. The actual difficult journey starts after applying for the loan. Lenders inspect your details thoroughly till they are fully pleased. They get numerous signs on different sorts of documents to get a reimbursement assurance from your side.

It takes years before you get final acceptance or descent from the business loan unit. Till then, you have to uphold your firm growing plans, which may impact your income objectives.

Challenge 4: Dearth of a good business plan

Many businessmen are uncertain about how to design a convincing plan that will attract lenders. They encounter several barriers, including an incomplete business strategy that summarises the model, audience size, competitors, scalability, etc. Financial institutions ask for a duplicate of the plan to decide how nicely your business will work and whether you will be capable of reimbursing the loan. For this, you can hire top financial planning companies to assist you, with the financial planning and analysis of your business.

Challenge 5: Inadequate Cash Flow Management

It is the most effective challenge that numerous entrepreneurs undergo while growing their firm. Although cash flow is crucial for a company’s survival, many entrepreneurs work to disburse their bills and fulfill other responsibilities because their customers do not make timely settlements.


There may be countless lenders who give loans, but at AGIl, we assure you that your loan will be backed without any trouble. To know more about finance and investment, get in touch with experts at AGIL & get our best financial planning services.