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Mark Cuban: Only Morons Start a Business on a Loan

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June 14 (Bloomberg) -- Entrepreneur Mark Cuban discusses the U.S. Economy and starting a business with Trish Regan at the Clinton Global Initiative in Chicago on Bloomberg Television's "Street Smart." (Source: Bloomberg) --Subscribe to Bloomberg on YouTube: http://www.youtube.com/Bloomberg On Bloomberg Television's "Street Smart," hosts Trish Regan and Adam Johnson bring you the most important market news and analysis affecting the S&P 500, Dow Jones Industrial Average, and the Nasdaq for your last trade of today and first trade for tomorrow. Broadcasting daily from Bloomberg TV's headquarters in New York, this business news show centered around the closing bell on New York exchanges, is targeted to provide the best analysis of the day's leading market headlines with a mix of original reporting, earnings news and expert sourcing from Wall Street's sharpest options traders, equity strategists and company analysts. Trish Regan and Adam Johnson provide actionable insight on the capital markets daily with regular segments such as "Chart Attack," depicting likely market moves before they happen, and "Insight & Action" which explains original trading ideas that can make you money. In addition, "Street Smart" is filled with breaking news, political analysis, and market-moving interviews with exclusive guests such billionaire investor Carl Icahn, hedge fund titan Bill Ackman, automaker Elon Musk and more. "Street Smart" broadcasts at 3-5pm ET/12-2pm PT. For a complete compilation of Street Smart videos, visit: http://www.bloomberg.com/video/street-smart/ Watch "Street Smart" on TV, on the Bloomberg smartphone app, on the Bloomberg TV + iPad app or on the web: http://bloomberg.com/tv Bloomberg Television offers extensive coverage and analysis of international business news and stories of global importance. It is available in more than 310 million households worldwide and reaches the most affluent and influential viewers in terms of household income, asset value and education levels. With production hubs in London, New York and Hong Kong, the network provides 24-hour continuous coverage of the people, companies and ideas that move the markets.
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Text Comments (4006)
Willanie Bouwer (20 hours ago)
This guy is an *ssh*le. It makes business sense to start a business with a loan because you get to deduct the loan payments from tax-this is basics. I would honestly rather take out a loan to start a business than to give up an equity share to a silent investor partner *cough* *cough* loan shark* like him...
Nosa Iyare (1 day ago)
This was obviously before Facebook live
syed haque (1 day ago)
This guys loves to hear himself. 20 years ago he sold Broadcom to Yahoo for $5.7 Billion ( yes with B) and his current net worth is $3.9 Billion. And he is a Business Guru? There are bullshitters like him or Trump and then there are people who keep minting money quietly and giving back value to the world not big talk. I am honestly amazed whats the big deal about him. He is like those one hit wonders in 80s but some how still think they are cool even now.
xevious2501 (2 days ago)
Bottom line if you do take a loan, only take 25% or less of what you think you need. In that way whatever happens your not on the hook for 100% of your estimated amount. But i do agree, if you can find a way to avoid a bank.... ALL THE WAY YES AVOID THEM!!! Because a Bank LOAN, aka DEBT looms like an elephant on ones back. because your likely never to acquire the amount needed in time to keep all things in check. Banks loan for the sake of people going in debt. interest rates. they want you in a hole paying them nonstop.
Sean Swedenburg (2 days ago)
Disney started bc of a loan and today they’re worth 25x what mark Cuban is worth.
Frank Artus (3 days ago)
acornsgrants com , helped me with grant of $45,000 to complete my project
spidey sense vlog (3 days ago)
Wait he has borrowed money in his beginnings to start and run a bar
froilan anthony (4 days ago)
bank doesnt care only venture capitalist
sylas Rosemary (4 days ago)
acornsgrants com helped me financially when i need funds for my business, i got the sum of $20,000 from them
Jevon Piper (4 days ago)
I started my first business with a $180,000 purchase order. I would not have been able to borrow the $80,000 I needed to fulfill the order and show my client that I could deliver without a taking out a loan. Sorry Mark, if you do not have enough savings to cover a large purchase order, you ultimately NEED A LOAN... that is of course, YOU ARE A MORON and give away part of your business to a guy like you.
Codi (4 days ago)
Work smart!! Best advice right there.
Nate Jones (5 days ago)
“I’m working 24 hours a day.” Shut up, Mark. You’re working hard. Acknowledge your hours of sleep before you send other people into suicidal depression.
Adam Laframboise (5 days ago)
its called leverage BUT yea if your stupid, leveraging for a small business is SMART
Juan Valdez (5 days ago)
Vince McMahon got a loan when he first started his business. I'm pretty sure he did ok for himself.
maworeb (6 days ago)
Mark is a Moron, I started my business by a loan and I'm quite profitable now so F you Mark but congrats on your successes!
Ismael Muñoz (6 days ago)
Obviously, most of you guys don't get the point. He's encouraging to figure out whether your potential business will thrive or not, bootstrapping it before jumping into a loan and get slapped in the face by the reality. Loans should be used as multipliers once our business is solid and under a profitable formula. In the beginning, some mistakes will be unavoidable, better overcome to them with little or no debt.
Robert Hurley Jr (6 days ago)
If you love tiddly winks I don't think you can turn that into a business. Every other piece of advice seemed solid but I haven't succeeded yet.
Boris A (6 days ago)
Start a business regardless!
Kyle Pleban (7 days ago)
"Only morons" ..... *gets loan for his bar*
lo swag (8 days ago)
Everybody saying he took a loan so why is he saying this He saying this from experience dumbasses 😂 Stop hating and start doing 😂
Roman Shepelenko (8 days ago)
Stupid mother fucker , do you see ????`t?????????????preperation to a questand i likion ?fuck the system , do you people see how journalist get strai t information ? its just fuckingh around , and i like america
Ali Bee (10 days ago)
Richard branson disagrees
Mandhan Academy (14 days ago)
legendary lecture !
Praphon Wongwikan (17 days ago)
🌟。*。💗~😃xXx 。💚。*。Have。🌟 🌟。a wonderful day. .💜´*。.🌟¨¯`*❤。。🌟🎩 😁 👕👍Great! 👖
Praphon Wongwikan (17 days ago)
Brandon Messer (18 days ago)
Dude. Wtf is he talking about. You never use your oen cash. Thats business 101. Fucking elites
devilhere17 (18 days ago)
Either Casey neistat was a jackass or mark cuban. And I can bet on Cuban being that.
Husnain abbas (18 days ago)
i took a loan from my credit cards that gives 0% Interest for 12-18 months so all i am paying back is just the money i borrowed. Amount was $60k Which i paid it back in only 9 months.
peanutbutterisfu (19 days ago)
Depends on the business and what it’s for. If you need 10k to buy a trailer to start a transportation business then I don’t see a problem with that. It’s a small amount of money, you can work a job while you start it and if you fail you can sell the trailer. Now in my line of work automotive repair, you should generally buy all the tools and equipment you will need before you even think about opening a shop. You should also have start up money for payroll, parts, monthly bills etc.. then you should have money for your personal monthly bills for a while to ensure you don’t close your business because you can’t pay your home mortgage for 5 months while your business grows its customer base. I do feel that it is ok to get a mortgage for a building because it can be a lot cheaper in the automotive world to buy a building and have a $2,000 per month mortgage rather than a $4,000 per month rent payment. But that’s about it for loans with a repair shop just a mortgage unless you are buying a very profitable turn key business then a big loan might make real sense. All in all it depends on the business and if it makes realistic sense.
Justin Fay (22 days ago)
Mark Cuban: "go for it!.. Unless you have no money to begin with anyway.."
Bruno Raschio (23 days ago)
I always look for businesses that have a very ambitious owner, he puts his money in his business and reinvests his profits for growth. Those are clear signs i look for when i invest in private equity through my company Grand Bay Investments
Nick Foles (5 days ago)
Bruno Raschio what you just said describes a business owner like me. I’m working toward a goal of developing 50 units of a franchise restaurant brand
Intuitive Observer (27 days ago)
Student loans and business start up loans are a cultural handbrake in the US.
John Tipton (28 days ago)
Mark I have to disagree with you on the moron statement of borrowing money to start a business. I started with a bank loan to fund my car rebuild business. I happen to do very well for myself and my family and multiplied my money far more then what I borrowed. And I just keep making more money. If i'm wrong explain my success ?
Willie Peppers (29 days ago)
Joe Hernandez (1 month ago)
Maybe he remembers what he went thru after the loan he got. He probably went thru hell, that's why he says you're a idiot if you take out a loan. Just preventing ppl from making the same mistake??? Idk.....just a theory on the guy.
Little Bird (1 month ago)
I kind of agree with that. I have started 3 businesses from absolutely nothing. One by accident really. I started a fourth but, it was just too much aggravation so, I walked away and lost nothing!
Ms Money Boss (1 month ago)
Truth with his first point. If people really wants to start doing business, they should start making excuses.
Christopher Brown (1 month ago)
Expeditetools com helped me financially .They sent me over $35,000 through their tools.
Jar balla 420 (1 month ago)
Sometimes when you get to the top its hard to remember when you were at the bottom. " Starting a business with a loan.. you are an idiot" Yeah... says the Billionaire Lmao
Touchdbyhaze (1 month ago)
I put up my own money but it’s not easy....smh but it’s possible.
Maquez Elizabeth (1 month ago)
Expeditetools com saved me from debt when i was going bankrupt .With their help i got $40,000 .I am so glad
Mus Tinter (1 month ago)
Hi i am moron
Tom Tonev (1 month ago)
Hes not wrong. I started my construction business with nothing but a car and a hammer. I had 10$ in my bank account so dont tell me you need money to start something
brian martuszewski (2 months ago)
Thumps up
Wild Man (2 months ago)
Tree service business. Me and a friend started a tree service on $300. Chainsaw, rope and ladder is all we had starting out. We were making 5k a week in the summer months. It’s pretty hard sometimes, but if you would rather be your own boss then it might be worth it to the right guy.
Motorsports Unlimited (2 months ago)
What a very smart Idiot.
Addison Tharpe (2 months ago)
I don't agree when he says competition. If you come in just be different. Why compete? When you ca be different...
TacMed 419 (2 months ago)
Alot of fluff and not much stuff in that conversation.
OG Herefano (2 months ago)
Says 2 to 2.5 GDP is new norm. He’s a jacknut like his daddy Obama.
Eric Batrez (2 months ago)
I borrowed 25 k to.start my business. I purchased a truck, chemicals, got insurance, contracts drawn up and went to work. I could not have done that if I did not borrow.the initial capital required. 15 yrs later I have several full-time employees, great income and live comfortably. It's easy for people like Cuban to sit on a high horse and preach...
Eric Batrez (2 months ago)
Mark Cuban is a morron for stating that only morons start businesses by borrowing money. He started his first real company with " help" from previous customers that he did business with. Soooo, he borrowed their money....
ken Carothers (2 months ago)
Cuban doesn't know the difference between money and currency, the debt based monetary system we live under. Fact, big head little teeth Cuban got a loan for his bar , paid employees cash blah blah blah. Don't listen to me, I'm only from pittsburgh
ken Carothers (2 months ago)
Don't forget the illegal poker machines
ken Carothers (2 months ago)
Big head little teeth
TikTok Meme Machine (2 months ago)
Mr Cuban and I may disagree with one anothers political views in regard to the current commander in chief but with concerns to the execution of a business, Marks logic is undeniable.
TikTok Meme Machine (2 months ago)
This title made me all fuzzy and warm inside with glee. Very smart.
jerry giannatos (2 months ago)
Mark Cubansky which is his real name. Says it all and all sort of help and loans this clown has received
Ms Tango (2 months ago)
Most people would love to have enough capital not to borrow money but sometimes people need to borrow
Commercial MarketPlace (2 months ago)
I guess you shouldn't believe everything you hear on the internet. If you feel you need a loan, then get one.
Yes took out a loan and say it's for morans that's only cuz he been thru it and it failed that's why he telling people like us don't do it cuz it's a set up basically he right no matter where you get the loan no matter gives a damn about your business but you that's why you someone who really cares and want to see you win and maybe depending on the loan amount they won't ask for it back
Jeff Phillips (2 months ago)
Mark Cuban is a friend of a friend so I’ll be nice. I don’t think Mark understands valuation. A nascent stage business can be valued 3x to 4x times more than a comparable firm because the more l leverage you have, the less your WACC (weighted average cost of capital) will be. If I have a cash flow business, I’ll take debt over equity any frickin’ day. Basic entrepreneurial sense. Mark is an equity investor and if his supposed smart portfolio companies understand DCF and WACC analysis, they wouldn’t want his money.
David Burke (2 months ago)
Most small time biz need about 5-6k to start ..love him but I disagree
Paul Rivera (3 months ago)
Blah blah blah Mark!! You must be a moron then, because I heard that you took out loans for businesses. If you are going to talk, speak to the regular guy. Speak realistically.
Craig Hall (3 months ago)
Fuck off mark sometimes people need a hand ya grub
jOSE Cant SEE (3 months ago)
Cuban needs a whole body condom
Ariel Ortiz (3 months ago)
No wonder Trump hates this guy. A business loan you payoff little by little but you own 100% of it. This guy is like a mob boss, he fronts you the cash for a portion of your business, when you try to go seperate ways he wants ypu to buy him out at a unreal number, so the whole time youve been doing 100% of the work for a 70 percent take, then he want his buyout i bet at significant high return on his initial capital, say he fronts you 300k, now want 500k buyout,, umm yea,, gfy.
Robert Todd (3 months ago)
I am happy i got in touch with expeditetools ,com ,they saved me from bankruptcy when i was going through some bad times in my business .I received over $120,000 through their tools
Jesús Viccama (3 months ago)
Jason Graystone, first i was confused then i'm like wait, didn't this guy get a loan to buy a bar, i came here to comment that and i saw so many people was thinking the same thing.....
Wisdom Carl (3 months ago)
Loans are difficult, banks would ask for collaterals and stuffs that we probably won't be able to provide. I was introduced to deep hacking where you get jacked transfer and I gave it a shot and on first trial I got over $20,000. I kept doing it and i have made alot. My friend who I recently introuduced to it has recently bought an apartment in Dubai. Expeditetools ,com are the people providing these hacking service.
J D (3 months ago)
What if the business is already established...and your just trying to buy it.
LionKing (3 months ago)
What he's NOT telling you is the amount of Loan NOT to take out VS how to start a business without a loan. Not going to wait 10 years to save and then start a business. BS advice. He's scared someone else will steel his spot
Derrick Bundy (3 months ago)
He's a Moran
Brandon M (3 months ago)
I thought this said, "Only Mormons start a business on a loan"
T Decarlo (3 months ago)
How the he’ll you are supposed to start a business without any money.?!
MLMRC.COM (3 months ago)
hmmm wow how about that.
iliketakingshowers (3 months ago)
I'm watching this on youtube
GODDEVA (3 months ago)
"SFI has taught me so much about ways learn and earn. It has made a big difference and my success is building. Being part of SFI has given me the skills and confidence to grow and develop."
Impair Sosa (3 months ago)
If i dont get a loan how else do i get the stupidly high amount of money it takes to start the business i am interested in
Frank’s Detailing (3 months ago)
Badass advice right here. When I started Franks Detailing I almost got a business loan but now I’m thankful I didn’t!!!
Berkay Sürmeli (4 months ago)
Who the heck is this guy? Chobani started on a loan, idiot. It’s the fastest growing company in the entire United States. They sell yoghurt. It’s not the matter of how you start. It’s the matter of how you make and sell the product.
George Is Straight Elite (4 months ago)
Mark your Jewish privilege is how you lucked up. Can’t speak for the gentiles.
Malik McLean (4 months ago)
If I want to start a real estate development company then what do I do?
Design Media Consultants (4 months ago)
Using loans is a financing tool that is useful in many situations. There are also many types of loans, some do not cause a business borrower to be personally liable. Plus many businesses are started with just a small amount of capital and the loan is not that large. There have been many successful business owners who started by using credit cards. Not true to say only a moron starts a business on a loan. I was a business consultant turnaround expert and provided management, marketing, and venture capital financing. Cuban, you are wrong!!!!!!
Roy Lange (4 months ago)
Very funny he would say that morons would start money with borrowed money. The founders of YouTube started youtube with borrowed money on a credit card and sold YouTube to Google for 1.9 billion in 15 months!!!! That Was a faster fortune than you ever made Cuban...
Be Cool (4 months ago)
Small and big businesses fail because of lack of cash. That is a universal truth.
Ruben Lopez (4 months ago)
He doesn't hold the government to the same standard.
WRESTLING FEVER (4 months ago)
But return on investment is greater for borrowed capital
patrick hayes (4 months ago)
Don't get a loan you're a moron if you get a loan to start a business says the billionaire who borrowed money to start a business what an arrogant ass hole and I like you Mark Cuban but that was pretty shity thing to say billionaire arrogance
VesselofMercy100 (4 months ago)
Maybe he is talking lessons the learned the hard way. The advice he is giving is the best case scenario. I started my company with no money down. I just put money into equipment needed or rented equipment until I could afford to buy it. Over %70 of businesses fail within the first 2 years. Bringing a monthly note into a business that doesn’t have established customers, or product orders means your starting with no guarantee of income, and a monthly payment. If you went into a business with large amount of work that is promised or contracted. I would feel more comfortable taking a loan. But liquid is the best way to get going.
naturegurl83 (4 months ago)
he didn't even answer the question? so how are we supposed to get the money then? Youre a moron
DarthVadent (4 months ago)
All of these condescending, self-proclaimed entrepreneurs often enthusiastically opine on the virtues of "hard work", flaunting their business acumen by admonishing against those who apply for loans to start their business, as if you didn't need capital to establish one in the first place (Hint: You do) whilst also disregarding and delegitimizing the barriers to entry, as if all that was needed was pure, unadulterated gumption and mind-numbingly vacuous motivational speaking seminars. They never delve into any rigorous, logistical detail on effective strategies based on statistical data or empirical evidence. It's all just "Bob in Pennsylvania left his 9-5 corporate job and did XYZ after reading my book and now he owns 50 businesses and makes 500 gorillion dollars a year." That's nice, but how about presenting some reliable, reproducible and scientifically rigorous analysis on how to start a business instead of citing one personal anecdote after another?
Steven Gupps (4 months ago)
thanks for upload
Zack Srisauy (4 months ago)
My parent’s started a restaurant business on a loan 10 years ago and it’s striving. It’s really an “all up to you” type of lifestyle. There’s no one size fits all linear path
D. A. (4 months ago)
Tbh if you qualify for a business loan from a bank then you definitely should. Not those shark loan companies.
dat boi (4 months ago)
Must be easy to say being a billionaire
Steven Gupps (4 months ago)
Nick Conte (4 months ago)
Hey Mark, I listened to your advice. I paid cash for college. Paid cash for my new car. Bought a home, all cash. Now, I am using the leftover funds to start my business. YEAH.....OOOOKAY.
Serenity Love (4 months ago)
Okaaaay so how do I start a business if I'm broke ASF without a LOAN ??😒
Edward A (5 months ago)
So I guess Mark Cuban is a moron since he started a business with a $15,000 loan himself. Yeah, I'm going to listen to a moron that makes complete sense.
Azriel Leyva (5 months ago)
This advise isn't fair. Mark borrowed $15,000 from his college friend Evan Williams to open his first business, Motleys. He was successful and the college bar became a hit. The lesson is have wealthy friends and family who believe in you. He's a brilliant man but he wont be what he is if he didn't have the network of friends in his early years.
Android VS (5 months ago)
I started doing business from 1$ and after 3 months and now I'm still struggling.
Chad Pru (5 months ago)
Cyban retained capital to start businesses by simply saving. He literally sacrificed he life. He lived with several guys and ate ketchup sandwiches. Instead of getting in to debt he saved. Most people want a big pile of money because we are consumers. Cuban has done the work that most people arent willing to do.

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