Apply for a loan via online lenders for bad credit today
With an online loan for bad credit, you can receive money. You may click here to find out more for online loans with bad credit.
Most banks are more reluctant to lend money to starting independent entrepreneurs. This is because the income of the self-employed is often uncertain. The bank runs a higher risk to someone with a permanent job and therefore you will have to meet more conditions before you will receive a loan. The credit institution may, for example, require that you have been active for several years and will request the annual figures for your company. Companies that have been successfully active for several years usually receive a new business loan fairly quickly.
Applying for a business loan from a bank usually involves a lot of hassle. That is why nowadays you can apply for a business loan much faster outside the banking sector. You borrow in this way without a bank and often even without annual figures. Please note: If few conditions are set, if no annual figures are required, if credit is granted very quickly and smoothly … then the interest rate on your corporate credit is usually sky-high. In that case, interest rates of more than 25% are no exception. You must carefully consider whether you will be able to repay such a loan.
In addition to regular business loans, there are other creative ways to get money quickly. If you currently own a car privately, you can possibly sell it and invest that money in your company. You can then borrow from your company to buy a new car. This is possible, for example, via FinanceGuru without numbers. In this way you can already have a new car from 150 or 200 euros per month.
Types of business loans
Each financial institution can decide for itself what types of credit they offer to the self-employed. For example, some institutions do not want to lend to new entrepreneurs or to companies that only have a low turnover. So you have to look for an institution that you can work with. In general, you can say that there are four types of business loans.
These credits are intended to give new businesses a boost. Usually, it concerns relatively limited amounts up to, for example, 50,000 euros.
These credits are aimed more at existing companies that want to grow faster by, for example, purchasing new machines or by investing in more staff. Often it concerns amounts of more than 50,000 euros and you can choose between a fixed or variable interest rate.
If you want to purchase a property, you can also apply for a mortgage loan. A mortgage is then opened so that the business premises serve as collateral for the loan. For this reason, you can also use this form of credit as a starting entrepreneur.
Just like with private individuals, you can open a credit line as a self-employed person, so that you can easily withdraw money to, for example, bridge a difficult period in which you wait for payments from customers, while you have to pre-finance your stock.
With factoring you immediately receive an advance payment on the invoices that you have prepared. In this case, you no longer have to wait 30, 60 or 90 days before the money is in your account. Especially when you work for large companies you are often confronted with such long payment terms. The large company often sets this as a requirement and as a small entrepreneur you have no other choice and you must allow this deferment of payment.
Business plan and financial plan
Young companies are usually expected to submit a business plan and financial plan.
In the business plan, you describe the objectives of your company and you explain what you want to achieve in the future. You describe the market in which you are active, how it evolves or how you have found the gap in the market. You clarify how you will compete against competitors and explain what makes your product or service unique and attractive. You also explain how you will market the product, how you will attract customers with promotions or advertising campaigns, for example. Banks often ask for a SWOT analysis: you must determine the strengths and weaknesses of your company and you must list the opportunities and threats for your company.
In short, in the business plan, you present in detail what exactly you want to do, why and how.
In the financial plan, you make an estimate of the revenues, costs, and investments. For three to five years in the future, you try to estimate how much revenue you will realize, how costs will evolve, which investments you will make and when, and what impact extra employees can have on sales, for example. In this way, you can determine how much money you need to set up the company or to be able to finance a certain investment or expansion. The financial plan will make clear how you can pay off your business loan in the future.
With a sound financing plan, you increase the chance of a successful loan application. In a conversation with you, the credit institution will ask additional questions to get a better picture of your repayment capacity. If all the information you provide is convincing then the business credit will be granted.
However, there are also exceptions. At Harrison you can quickly borrow for business without annual reports and business plans. With this provider, you also pay back daily through the collection. This way, one large amount does not always disappear from your account every month.