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Business Loan for entrepreneurs? These are your options

Do you need a financial injection for your business? Read on and learn a few ways you can and where to borrow. We bring you a comparison of bank and non-bank loans. And if you do not want to read, go straight to us. We will advise you there.

Do you have the idea of ​​a million business, but are you missing the initial capital? Or are you already working on your dream project, just needing to get a little “financial injection”? Read on and learn a few ways and where you can borrow for your business. Do we bring you a comparison of bank and non-bank business loans that are the most advantageous?

Bank loans

The most common way you can choose if you are looking for financing your project is to apply for a loan at the bank. It’s an option to get high amounts from a verified resource with long-term repayment options. A disadvantage, however, may be the lengthy process that prevents bank credit. Banks are whimsical in who they borrow their money, and they care very much to look their head from the head to the heel, and unfortunately this whole process accompanies complex paperwork. What to prepare if you apply for a business loan? The Bank will want at least a minimum company history (one or two completed tax periods), a regular payment to the health insurance company, SSA and the Tax Office, a positive business result and proof that your company is not in liquidation, bankruptcy or settlement.

From the beginning, you have the possibility that the bank will not approve your loan application. A bank loan is also often closed for a long time, and the borrower must have a bank account in most cases. Banks also generally do not provide short-term loans and prefer to choose longer-term clients. Thus the disadvantage is a lot, the advantage can be lower interest than with non-bank loans, which can be found elsewhere today.

Investor

If you do not want to go to the bank and you need to get funding for your project more individualistically, finding a suitable investor can be the way for you. But that may not be as easy as it seems. Finding and, in particular, persuading the right investor to support your project may be long. First of all, you must be excited enough to invest in your business to make a large amount of money. But nothing is free, and this rule also applies to investment. No investor puts money in somewhere where he does not dump anything, and that is why difficult negotiations are taking place. What role will the investor play in the project? You can only agree on a loan with a certain interest – which would be the simplest option – but much more often when talking to the investor, you are talking about the percentage of the income or the share in the company. And the higher the amount, the higher the shares will be – not to mention that every clever investor will try to negotiate a majority stake so that he can influence the business at any time for his benefit. These are the risks that you have to count on. On the other hand, the investor may not just be a hungry supporter that cuts your project into pieces. If you choose correctly, you can also supervise and supervise your project within your own experience and be such a good asset to the team.

Crowdfunding

In crowdfunding, a large group of people will be part of your project, each contributing a relatively small amount (usually between 100 and 5000 crowns). Crowdfunding then offers you two ways to motivate your contributors to invest: one option is to bid on your project, the second option then offers rewards. Often, it is a form of merchendising, a service voucher, a movie title, etc. The amount of reward increases depending on how much the contributor is willing to invest – the one who has contributed the most can then acquire certain powers to influence the project.

Crowdfunding does not give you credit as such, but rather a form of investment. A disadvantage over other variants may be the emphasis on the well-thoughtful promotion you have to create for that method so you can make the most money. Thanks to this promotion, however, you are more likely to talk about your project within a large group of people before you even finish it. “Crowdfunding is especially suited for beginner entrepreneurs who want to turn their fans’ feedback into real orders and verify the concept of their business’ nonsually ‘,” says Jonathan Herza, a hunter for the Hithit crowdfunding server. “We can raise capital up to 2.5 million crowns, as well as contacts with our first customers, which is very valuable.”

Factoring

In principle, factoring works as a method of financing short-term loans, whereby a factoring company purchases your issued receivables. Factoring has three major benefits. Firstly, a factoring company takes over all the risk of default. Secondly, it is responsible for the overall administration and administration of the claim. Thirdly, factoring is offered as a possibility of quick financing. When can you pay for it?

Let’s say you do business in a fast-paced sector, you can not wait a few weeks before the invoices expire and you have to put high demands on your working capital. In such a moment, you can pay to sell some of your factoring company’s claims and have it paid off within a few days of exposure.

But of course it has its own pitfalls. The price for this service (or services, if we take into account all three benefits that factoring offers) is usually around 10-20% per claim. It is based on the amount of work that the factoring company will have – in terms of one large claim, the price will be lower than if it is a smaller one. Companies are counting on the risk that may arise in the absence of payment (with more borrowers the risk is greater) as well as with the overall administration, which of course is more complex with the increasing number of receivables.

Non-bank loans

Last but not least, there is another option: non-bank loan . It may seem at first sight that companies offering loans in the non-banking sector will mainly offer small loans with short maturities. But it does not have to be so. Compared to a bank loan, which can be lengthy and complex, it is, of course, a much simpler way to get an investment into your business because it offers much more benevolent conditions for getting it. Unlike a bank, the private entity does not place an emphasis on your payment history or the ability to repay. You can get a loan so much faster, without complicated paperwork, and you have a better chance of getting your loan approved since the application. But it’s not just small amounts.

For example, if you make a business loan (which offers the most advantageous business loans in the non-banking sector for the long term), you can get up to 50 million crowns much faster than when you apply for a loan at the bank. Companies in the non-banking sector can not only cope with banks, but often overcome them with high flexibility and a better personal attitude.

The correct course of non-bank loans is supervised by the Inspection, which can be contacted if it suspects that it is not behaving fairly within this sector. The non-banking sector thus offers the same credibility and manageability to entrepreneurs.

These are the basic ways to get finance into your business. And now that you know, you can boldly embark on the realization of your dream!

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