Are you an entrepreneur or a consultant looking for information on business loan? Then you’re in the right place.
I will explain to you what are the essential documentation for obtaining credit, so that you can manage and finance as many business projects as possible.
Think, for example, of the possibility of being able to buy a new machine, or even the possibility of being able to find stocks for your business.
Types of business loans
Now let’s find out what are the most well-known and appreciated forms of credit for professionals and entrepreneurs.
Let’s start with the main forms of loan for short-term companies:
Personal loans: get up to $ 60,000
- Opening of current account credit: this is a loan with which your credit institution makes a sum of money available to you on the account, which you can use on one or more occasions, reintegrating it and reusing it even later, within the limits of what has been granted to you. Availability can in fact be restored with subsequent payments from you.
- POS transaction advance: it is a particular loan that is aimed primarily at merchants, and that will allow you to obtain a credit equal to a percentage (generally 80%) of the amount of POS transactions that are made in your store during a certain period of time (usually one year).
- Commercial advances: these are lines of credit that the bank can make available to you to anticipate your customers’ credits. Among the main and most famous are the advance invoices and the successful completion of the commercial portfolio, or the support for your treasury needs, and much more.
- Loans for working capital: these are loans dedicated to those entrepreneurs and professionals who need liquidity to be able to cope with financial needs that can be linked to the short-term business production cycle. Think, for example, of the possibility of supporting the increase in inventories, payment of suppliers, and so on.
Loans for medium-term companies
As the name suggests, medium to long-term loans refer to all forms of credit with a duration of more than a year or 18 months. Let’s see them briefly:
- Industrial credit: it is a medium-long term loan for those entrepreneurs and those professionals who wish to have a sum of money with which they can cover different needs. You can use it, for example, to find liquidity with which to meet various expenses, buy equipment and furnishings, consolidate short-term liabilities.
- Land credit: this is the credit typically associated with real estate investment transactions. From purchase to restructuring, you will be able to cover all the relative costs up to the limit of 80% of the same, making the repayment in monthly, quarterly or six-monthly installments, at a fixed or variable rate, with generally very long terms.
- Leasing: it is a financial instrument that will allow you to have an asset instrumental to the exercise of your business or professional activity, in exchange for the payment of a periodic fee. At the end of the contract, you can choose whether to exercise the option to purchase the asset, at a set price.
Loans for farms
Certainly a specific range of loans for companies concerns the loans that are directed towards farms. Also in this case, as we have already done for the generality of companies, we can summarize the main forms that you can find in all the banks:
- Operating loan: this is a loan whose purpose is to anticipate and integrate the capital needed for the agricultural campaign of your company, or the financial costs of using and processing the products of the fund. For example, you can buy seeds, feed, fuel, fertilizers, or pay various benefits and consultations.
- Improvement loan: this is a credit which – as you can easily guess from the name of the product – aims to allow you to finance small maintenance and improvement works. Think of some examples that could be about you: do you want to pave a land or make a ditch? Do you want to install a fence or a gate?
- Agricultural loan: it is the medium-long term credit instrument with which you can face the most important expenses, such as those related to the purchase of land ownership, consolidation of burdensome liabilities, structural improvement of funds, and much more!
Requirements for obtaining a business loan
After I showed you the range of corporate loans you can find inside your bank, here’s how you can get one.
The documentation is not at all complex, in fact (as it happens for a personal loan ) you have to bring a company document, a tax return and expense vouchers but only for your company.
In light of this, he prepares in a dossier:
- Identification documents of your company / company: memorandum, articles of association, company registration, powers to directors and attorneys.
- Income documents: they depend on the legal form of your business activity. Try to ask the accountant what you need (Single Model, Company of Persons, Company of Capitals, etc.), and in any case prepare the last or the last two financial statements.
- Speaking documents: depending on the type of loan you wish to obtain, it will be necessary to produce some supporting documentation, such as the estimates for machinery you want to buy, and so on.
Of course, the above is only a “basic” kit that you will need to prepare for your bank.
The lender’s adviser will surely suggest you other necessary documents, such as a business plan, an interim accounting plan, and so on.
Once you have provided the bank with all the useful documentation, and after signing the loan application, the institution will initiate a formal investigation.
In fact you will have to understand if your business is able to generate sufficient profitability to be able to repay the financing in the times and in the agreed ways, so as not to find yourself restructuring the eventual debt.
This will be done by the bank that will observe the solidity of the entrepreneurial initiative, giving a careful look to the operating margin. That is total control of profits, losses and cash flow.
Loans for companies in crisis
It is a recurring question: ” If as an entrepreneur I am in crisis, can I still access a loan?”
The answer is it depends on who you rely on. I show you a series of financial institutions that could be the solution to your case.
- Lite Lender: in the utmost transparency, the institution will try to help companies in economic difficulty. Currently 8 billion dollars have been allocated.
- Cream Bank: also with its money set aside, it could help you to be able to recover from the crisis.
- Best Bank: the latter especially in recent years, has tried to help many companies in the absence of liquidity. It could be a viable alternative for seeking financial support.
Loans for non-repayable companies
Loans for non -repayable companies are special loans that are granted to some entrepreneurs (partly belonging to disadvantaged territories or classes), which do not require repayment of the loan.
They are therefore real capitalization interventions, given that the amount granted must not be reimbursed to the person who gave them.
Generally allocated to European funds, they are equally normally managed on a regional basis.
Also try asking your category associations or the Astro Finance (where interesting financial measures often come together).
Loans for new companies
Another recurring issue when it comes to corporate loans is: can I get a nice loan if I just set up a startup?
Of course the bank has a certain distrust of a newly born company. However, there are situations in which the loan is accepted even for those like you who are in the startup phase.