Loans for SMEs: the fuel that could make your business takes off

There are usually two reasons why an entrepreneur needs a loan.

1. To start a new business. 

2. Need to invest in its existing business. 

Many times we want or need to start a business to achieve financial independence that we long for, but sometimes we have no money to make that dream true, and we try to get business loans to start the new business. Usually banks do not grant loans to new businesses due to the risk because new businesses often do not generate profits until a year; in this case, the mortgage is the option, so there are people who make the decision to mortgage their unique heritage in order to get the credit. Definitely, a terrible mistake they make. I know many people who have lost everything because of this mistake. It is preferable to get a loan from some renowned companies that offer loans in paperless as well as an instant; else many companies engulf your business in the form of heavy interest rates.

If you need a business loan, make a solid decision that the credit is to invest in areas of your business that impact directly on increasing your sales. And the amount of your loan must not exceed 10% of the capital of your company as more credit can jeopardize your company liquids. 

If you are looking for growing up your small or medium enterprises (SMEs), it’s important to investigate all credit or loan options you can, analyze them all and choose the one most suitable for your business. 

There are several types of credit to SMEs, and you need to analyze which one best suits your needs and fits your company.

– Credit to grow your SME: If your company has a sales growth of 30 to 40% annually, this loan is right for you. The credit amount is determined by your needs and ability to pay. The deadlines for this credit ranging from 6-36 months.

– Credit to acquire assets: This is the longer-term financing for SMEs (5 years) and to buy machinery, equipment, and transportation. To apply for this credit entrepreneur have to leave the invoice for the goods purchased and credit guarantee. The regular customer of a bank can’t apply, though, if you are a customer of the bank, the rate can go down (depending on your history with the Bank).

If you plan to purchase this credit, consider the performance you expect to get for your business as it’s the cost that you must use to compare with the rate of a loan.

– Revolving Credit: This credit will help you face problems of payroll or inventory. It works like a credit card but for the company, which you can arrange through online banking, branch or card. Its validity is usually for one year.

What are the requirements to apply for credit?

Requirements show a discrepancy depending on the institution, but typically take account of official identification, proof of address, (business and personal) references endorsement.