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