In search of business loans with reasonable interest rates and repayment terms? In order to fund investments or working capital, many new types of business financing have emerged in recent years. Consider the pros and cons of these business loans before making a final decision.
Because of the recent financial crisis, banks are less likely than ever to lend to small and medium-sized businesses (SMEs).
The Dutch market has seen new entrants from abroad and new financiers emerge. Business loans can differ greatly in terms of interest and repayment, so it’s important to do some comparison shopping.
Access to bank loans for small businesses
A bank credit or a bank loan is still the primary source of business funding for the vast majority of entrepreneurs. The bank is still the primary source of financing for about four out of every five transactions. Applying for bank business financing, especially for long-term large loans such as machinery or office space, is always recommended.
Ordinary SME loans can still be obtained from the bank. Even if the bank imposes strict conditions on repayment, collateral, or paperwork, the company has little control over the terms of the loan.
Obtaining a small business loan or credit online
Other types of lenders can flourish now that banks are becoming more selective about what they lend on. There is a growing trend in the use of the internet to obtain business loans and credit lines of up to 100,000 euros. Some financial institutions:
CreditAhead provides short-term business credit ranging from 3,000 to 250,000 euros. You can quickly purchase additional stock, replace broken equipment, or pre-finance a large job with this working capital financing. Your business must be at least a year old and have an annual revenue of at least €50,000.
Provides a current account credit (red) ranging from 10,000 to 2,000,000 euros to small businesses that supply other businesses and have a turnover exceeding 100,000 euros. It’s up to you how much money you take out and how much money you pay back. Your credit limit expands as your business grows. Only the money you withdraw is subject to interest charges.
Financing for working capital
Are you only looking for short-term financing, such as stock pre-financing, and not for long-term financing? A term of six months or less is typical for stock financing and other forms of short-term corporate financing. Supplier credit can also be a viable option.
Factoring companies offer a solution for working capital loans based on your debtors. Factoring allows you to get cash in as little as 24 hours by selling unpaid invoices that are sitting in your account. This only applies to completed orders and B2B invoices.
When small businesses are in need of funding, they are increasingly turning to crowdsourcing. Crowdfunding has a strange ring to it. It’s a bit like handing out hats to passersby.
Occasionally, this is true, but there are significant differences between the platforms.. If you have a large network of people who care about you and are willing to invest in your company, CrowdAboutNow is an effective platform.
Platforms that know enough investors exist if you don’t. Preparation is key, and they may request a tour of your entire business. As a result, the most important step is to weigh your options and find the best fit for your needs.
Risky start-up capital
No, because you haven’t started your business yet. When you’re done, you’ll be able to see what Qredits has to offer. Co-financed by the European Union, this club also offers special loans for new entrepreneurs in addition to SME credit. Additionally, there are favourable business financing conditions for established entrepreneurs.
Is it impossible to get a loan for some other reason? Then there is venture capital to consider. The risky nature of these loans is reflected in the name, which alludes to the investor’s willingness to take a chance. The high interest rates of venture capital are well-known, but the terms can also be more flexible. For example, in the first few years of this financing, repayment may not be required.