GROUP 2: Advantages and Disadvantages of Raising Finance from Different Sources
Bank
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A friend or colleague
Advantage
Disadvantage
A credit- card company
A pawnbroker
advantage
disadvantage
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easy to do
Annual fees.
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Moderate and fixed interest rate
Advantages
Disadvantages
Not related to friends
Paperless
Colleagues do not pay
Lots of loans
Interest rate are very high and a bank loan would be cheaper
Does not affect business ownership
More loving colleagues
Quick loan
No interest with colleagues
Advantage
No tax on the loan
The bank is not involved in the business
Valuable property must be mortgaged
Disadvantage
Easy to borrow
Quick and easy procedure
Can borrow large amount of money
There is a loan term and it is mandatory to pay both principal and interest on time
Just can only borrow a percentage of the value of the item you’re pawning
Cheaper interest rates elsewhere
Can lose the item if you don’t collect it or default on your loan
A loan shark
Complicated bank loan procedures
Other fees can quickly add up
Credit card surcharges
Easy to take advantage of
If the loan is disbursed late, it will be rated as difficult to borrow in the future
Able to get your goods back at any time
Credit damage
A credit card is safer than carrying cash.
Earn rewards points when you spend
Low loan amount
A member of family
Advantage
Disadvantage
Members of group 2
Đỗ Tùng Lâm
Trần Anh Tú
Phạm Văn Hưng
Lê Hà Linh
You can get interest-free days.
Loans with no collateral and low interest and possibly no interest
Long term loan
A credit card can build your credit rating.
Cash advance fees and rates
Overspending
No troublesome procedures
The loanable capital is not large
Difficult to borrow when family members have other purposes
Relatives will claim ownership of the company
Participate in company work
Affecting emotions when unable to disburse
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Disadvantages
No Reporting to Credit Authorities
Illegal Links
May be at a disadvantage if you do not pay
Sky-High Interest Rates
Advantages
Borrow a lot of money
People with no credit history can get a loan
Borrow quickly