The credit companies in Spain has been greatly reduced. The banks have turned off the faucet of cheap and easy financing, because of the excesses of the real estate boom. Hence, financing for companies has become expensive but difficult to obtain, especially in loans for new companies that offer the least guarantees and solvency, since they do not have recurring customer income. But in addition to the previous ones there are also other very difficult cases because of the credit restriction for small and medium companies, which for years have been practiced by banks and financial entities. These are loans for companies without endorsement, a type of high risk financing. because of the economic crisis that has generated many bankruptcies in SMEs apparently solvent.
But without a doubt it is small businesses that suffer the most from the absence of bank credit, such as what happens with loans for companies. That’s why the best solution to get loans to companies is to use an online comparator. Since getting funding can be very complex and difficult, because normally the period of study is usually long and precisely not without paperwork. However, little by little, credits are being opened for even small companies, which are the ones that have the most difficulty in obtaining bank or own financing through the provision of capital.
The best loans to start a business
Lately many unemployed have considered starting their own business. That’s why the loans for new businesses have shot up in order to finance all the necessary investment as well as having some money to pay the current expenses of the first months. The main problem with these loans for entrepreneurs is that they are not easy to obtain. Although many banks have decided to give loans to create a business. There are very few entrepreneurs who really get the financing they are looking for.
And many times the only way these entrepreneurs have is to offer personal guarantees as collateral, and thus be able to get loans to start a business. Although many times the financing to start a business is more expensive than for SMEs that already exist. The reason is very simple, loans for new companies have higher risk than for companies with several years in the market. And is that more than 80% of new companies end up closing. So this type of financing, as can happen with loans for small businesses, is the most risky for banks and financial institutions. So if you want to ask for any type of loan to start a business, you should keep in mind that you must have a good business plan, especially the part referring to financing, profit and loss account, and 12-month treasury forecast.
Loans for companies without endorsement
Depending on the amount can be somewhat difficult, because in loans for SMEs the amounts of money usually asked for exceed 6000 euros. And it is difficult to get money without collateral, usually from partners, or provide another type of collateral such as the mortgage. In addition, loans for companies without endorsement are usually very rare in the case of entrepreneurs.
Because loans for new companies are usually very risky for several reasons: entrepreneurs do not usually have previous experience in management or in the sector, most of the newly created businesses close in the first year, financing (especially in the form of capital) is usually less than the investment and current expenses that the business will generate. That’s why the best way to get loans for companies without a guarantee is to provide additional guarantees such as mortgages, loans for SMEs above 5000 euros, or resort to other forms of financing such as the use of credit policies, quick loans for companies of money amounts around 3000 euros. In fact and as it happens with individuals, it is easy to get mini loans without endorsement by being fast loans of about 600 euros in amount and a return period of normally less than 30 days.
How to get financing for companies
Any company needs financing to get money for its activity, face current expenses, or be able to make an investment, large or small. Although sometimes when a company goes through a bad time, whether due to an economic crisis or the sector, then it has to resort to loans for companies in crisis. The only financial solution when there are serious treasury problems. But this is a type of credit that is not easy, because in loans for SMEs in crisis is not the same ask for 10,000 euros than 30000 euros. That’s why sometimes the best way to get financing from companies and SMEs is to resort to private capital. In other words, give entry to a financial partner that provides money and sufficient liquidity to maintain the business. This form of financing by capital allows to increase the own funds necessary to avoid having to ask for money from loan companies. That is why it is a form of financing for newly created companies and SMEs.
The big difference between the contribution of capital and a bank loan is that it is a long-term form of business financing. In other words, the capital contributed by the partners is the true guarantee of an SME, limited company or anonymous, also unipersonal, for their creditors. And although commercial regulations usually establish the minimum capital of a limited company at 3000 euros, that amount does not mean much money to be able to develop a good part of the most common businesses.
Another way to obtain financing for companies and SMEs is to resort to indebtedness. Especially at times when banks grant quick and easy credit. The problem is that many companies, especially the smaller ones like the self-employed, abuse the financing of others. So they have debts much higher than their capital. What makes the business at risk of bankruptcy by increasing the risk of bankruptcy due to excess bank debts or business suppliers.
The most typical forms of financing between companies and SMEs are: the credit policy, the commercial discount, and short or long term loans. It all depends on the type of company and its ability to request financing, but the most common is to be able to borrow money in the short term through customer loans. That is why the commercial discount, normally based on the discount of bank promissory notes, is the most typical form of financing, especially in sectors such as construction or industry. Given the high use of promissory notes as a form of payment to suppliers.
Basically a promissory note is a security that implies a commitment to pay on a future date called maturity. And for this reason, not to wait for the maturity of the promissory note, the money of the promissory note is usually advanced in exchange for the payment of interest based on the number of days anticipated.
But if there is one type of business financing that is more frequent among SMEs, they are credits. Due to its advantageous conditions, being a financing for companies of the Official Credit Institute, they are widely used by any business. Although sometimes it is not possible to get an loan and SMEs, especially the largest ones, resort to mortgage loans for companies.
A type of financing that implies providing real guarantees, for example premises or industrial warehouses that serve as collateral in case of default when a mortgage is formalized. Also for the guarantees and the amount, mortgage loans are usually a solution to get loans to start a business. Given that it is precisely at the beginning is when more investment must be made to start a business. The problem with mortgages is that it is not a good solution as loans for small businesses. Because formalizing the mortgage implies having a real property, and if the company does not have it, the partners will have to contribute it.
Loans for companies and SMEs
The Official Credit Institute offers many lines of financing for SMEs of all sizes. This is what is called Lines and they offer many options for liquidity loans, innovation, export, etc. That is why loans for self-employed workers and companies are one of the most used options to finance investments. There are many types of loans that have very good conditions, both in terms of interest rate and repayment term. Although they are usually a type of financing for companies that are already in operation, that is to say that the loans for self-employed workers and SMEs are not usually a way to get money to open a business.
Unlike other solutions such as loans for start-up companies. The reason is that some lines, such as innovation is something unusual in small companies, much less when starting a business. That is why investment in R & D & I tends to be more in technology companies with a certain age, given that innovation takes a lot of time and effort. But nowadays the advancement of technology has caused that every time there are more entrepreneurs who are launched to start an innovative business. These are the so-called startups or highly technological companies.
But in addition to lines that encourage innovation, there are other types of loans, such as those that encourage exports. Although traditionally credits have been used to finance investments in companies. For example for the purchase of industrial vehicles, such as vans.
How to refinance a company’s loans
Sometimes business loans are burdened by high interest rates. Keep in mind that getting a loan depends on the solvency situation of the company as well as the financial market, so sometimes you have to agree to hire a loan for business with bad conditions. That is, with a very high interest rate or guarantees (mortgages or guarantees). In these cases, it is best to refinance loans, both banking and credit companies.
Because the other option would be to recapitalize the business by means of a capital contribution from current partners or new financial partners, which will allow the reduction of indebtedness. The problem is that it is a very difficult and slow option against the use of any type of business loans. Hence, refinancing debts is the best solution to solve liquidity problems. Basically, refinancing SME loans means canceling credits for companies with a higher interest rate, to add the amount of debts in one of the types of bank loans for companies. The most common solution to refinance business loans is to use a mortgage loan.
The car pawn new financing for companies
SMEs have a new financing formula, apart from banks and business loans. It is the commitment of cars, an alternative financial solution to the traditional and that allows to get money for the assets of the company. That is, it allows generating liquidity for those SMEs that have an important or valuable fleet of vehicles. For many years, businesses have resorted to renting instead of buying vehicles, so few companies have cars or trucks on their balance sheets. What closes the financing through the commitment of cars.
However, for those SMEs that have bought cars through financial leasing, they can generate liquidity through the commitment of cars. What can be translated into a quick credit for companies and businesses that have from a car to a fleet of vehicles. The great advantage of car ownership is that it is a credit for companies and urgent SMEs, since the loan is obtained by the car’s guarantee, not the business results.
Simply to be able to obtain this financing of companies, a valuation of the vehicle of company is needed. And depending on the value of the same will be the amount of money that can be received with the car credit for companies. If you need to do complex studies, being a type of SME credit without paperwork or endorsement. Since the guarantee is the car itself.