What are the Challenges of Borrowing from Lending Institutions?
While lending institutions offer numerous benefits, there are also challenges to consider:
High-Interest Rates: Non-traditional lenders often charge higher interest rates, which can be a financial burden. Stringent Qualification Criteria: Traditional lenders like banks have strict eligibility requirements, making it difficult for new businesses to qualify. Collateral Requirements: Some loans require collateral, which can be risky if the business fails. Debt Burden: Taking on debt increases the financial risk and can strain cash flow if not managed properly.