Small loan for independent companies

The right small loan for independent companies

The right small loan for independent companies

Growing your small business without debt financing gives many owners the feeling of constantly being in a circle. You need to hire new people, invest in new equipment and / or open a new business to increase sales and ultimately increase your company’s bottom line. But small, self-employed companies do not make enough profit to raise the capital they need to finance expansion.

And without expansion, it is unlikely that the company will increase its sales. Is a microcredit therefore the best option to close this funding gap?

Credit advice, if banks reject!

Credit advice, if banks reject!

  • favorable government loans by Intrasavings bank with indemnity
  • Rescheduling expensive current account credit
  • Order pre-financing and increase warehouse
  • Guarantee of the guarantee bank if the collateral is too low
  • Capital raising for other purposes
  • Consulting cost subsidy 50% to 80%

Contents Small loan independent companies

Contents Small loan independent companies

  1. Small loan for self-employed companies closes financing gaps
  2. Criteria for a small loan for self-employed companies
  3. Summary…

Small loan for self-employed companies closes financing gaps

Small loan for self-employed companies closes financing gaps

A small loan for self-employed companies can help to achieve corporate goals and provide necessary capital to drive business expansion. Nevertheless, a small loan for self-employed companies is usually difficult to obtain. In addition, the owner often has to vouch personally for the microcredit. Self-employed companies must have been in business for at least one to two years and meet the annual return requirements to qualify for a microcredit.

Not all companies meet the requirements for a small loan. Most banks have an income threshold of 1.25 times that of the company, including the repayment amount. Even if self-employed companies meet the requirements, the owners should carefully review the offer for the microcredit before you accept the microcredit and make sure that you can meet the repayment terms.

Criteria for a small loan for self-employed companies

Criteria for a small loan for self-employed companies

There are three main types of micro -credit : bank loans, microcredit and loans from online lenders.

Bank Loan: Self-employed companies need excellent business and personal security to qualify for a bank loan. The amounts can vary between 5,000 and 5 million euros. To qualify, self-employed companies must specify:

  • Creditworthiness: Most banks require a clean private credit score for a microcredit.
  • Business Duration: Most online lenders require at least a year of business operations, bank loans typically take at least two years.
  • Minimum annual turnover: Many banks require a turnover of at least 50,000 Euros for independent companies.
  • Proof of solvency: Banks want to be sure that self-employed companies are able to pay the small loan installments on time every month. They require detailed financial statements showing that revenues are at least 1.25 times the operating costs.

Microcredit: If the self-employed company is particularly small, it may possibly opt for microcredit as a small loan. These are awarded by non-profit organizations with a short term and up to a maximum of EUR 25,000. Microcredits also require detailed business plans and annual accounts.

Online lenders: If self-employed companies may not have collateral and need money fast, an online lender may be their best option for a microcredit. The interest rates are high, but also the approval rates. The funds are usually paid out within 24 hours.

Summary

A small loan can be the bridge that independent companies need to expand. It is important to carefully review the contracts and to consider alternative financing options. Finally, owners should make sure that they expand their business for the right reasons. Self-employment only for the sake of its size is not always better.