Doing business is not possible without adequate funding. This factor is particularly important in the initial period of the company’s existence, but unfortunately an aspiring entrepreneur may have a problem getting a loan.
Enterprises play an extremely important role in the development of the Polish economy. According to the PARP report, they are responsible for nearly 75% of all GDP. A special position in this group is occupied by the small and medium-sized enterprises sector, generating over 50% of GDP, as well as micro-enterprises that can boast of the largest investment effort.
Companies employing less than 10 people are a real driving force of the economy – they are already 1.94 million, and the trend shows that Poles are more and more willing to open their own businesses.
Sooner or later some of them will face the problem of lack of funds – without them it is difficult not only for investments enabling competition with other entities, but also for financial liquidity. Loans remain one of the most important sources of financing companies, unfortunately not every entrepreneur can afford them – this applies especially to newly opened businesses.
Although the market position of legal and natural persons is significantly different, the procedure for granting them loans is quite similar. For a bank that takes a risk by entrusting its funds to a borrower, the most important thing is the credibility and economic condition of the client. Therefore, after submitting the application, analysts carefully observe his financial situation and assess whether he will be able to handle the contracted obligation on time.
While in the case of individuals, the borrower’s current income is usually the basic collateral, companies are required to demonstrate income confirmed by a list of orders or contracts, or to present valuable assets. Unfortunately, companies that are just starting their operations usually do not have either. Until recently, this was associated with a lack of real possibility of taking out a loan. Today it is different, but still not all banks provide for this possibility.
Forms of business support
Financial support for companies can take many forms. Due to the specific needs of customers, banks have prepared for them several different products that can be adapted to the profile of a particular activity:
- Investment loan – this solution should be of particular interest to entrepreneurs who want to gain a competitive advantage. Its purpose is to provide funds for investments enabling enlargement, reconstruction or modernization of fixed assets, e.g. purchase of new machinery or expansion of the car fleet.
- Working capital loan – it is allocated to the company’s day-to-day operations to ensure financial liquidity.
- Revolving credit limit on the invoice – this product resembles an overdraft on the invoice, which individual customers can set on their accounts. However, entrepreneurs can count on much higher limits and more favorable repayment terms. The funds that go to the account will be first allocated to settling the debt.
- Credit line – the launch of the credit line allows free use of funds up to the amount specified in the contract, which gives a sense of security and instant access to funds. Unlike the overdraft facility, the credit line is not automatically repaid.
- Leasing – this way you can finance the purchase of not only cars, but also other equipment necessary to run a business. We wrote more about leasing in this article.
Banks for entrepreneurs
The situation on the corporate loans market was changed by banks directing their offer directly to enterprises. In this respect, Fine Bank, operating since 1991, has undertaken revolutionary activities, whose goal from the very beginning was to support entrepreneurship. Another factor that has influenced the greater availability of this type of products are local government, government and European entrepreneurship support programs, offering, among others loan guarantee option.
Self-employed workers can also count on a loan at Cream bank. Other entrepreneurs will have to wait half a year if they can provide collateral for the loan. Otherwise – just like in other banks – you will be able to get a loan after a year.
What documents to prepare?
Banks that decide to grant loans for newly opened businesses will want to carefully examine the financial condition of the entrepreneur and the legal status of the company. In some cases, analysts may also be interested in future prospects. It should also be remembered that in most banks the amount of credit will depend on the form of its collateral – so if we have assets or external guarantees, it is worth taking care of the documents confirming them. What might you need?
- Business registration documents,
- PIT from a natural person for the last 12 months,
- records of fixed assets,
- company account statements,
- documents confirming the form of loan collateral,
- business plan.
Loan for a new business
Beginner entrepreneurs can certainly not count on loans of very high value. However, the offer is wide enough that they should find a product that will help them spread their wings.Bank offers up to 30,000 USD distributed over a maximum of 84 installments, while giving the opportunity to suspend repayment for 3 months. In turn, bank offers a loan without material collateral up to 50 thousand. USD (with security up to USD 100,000), with a repayment period of 60 months.
Entrepreneurs operating for at least 6 months can run a credit line up to 200,000. USD in Cream bank. At Fine Bank, both the amount and the conditions are set individually, but the loan period can be up to 12 years. An additional benefit is the possibility of using the digital solutions proposed by the bank, including the Idea Cloud platform and invoice cloud facilitating company management.
New business loan – a viable option
Contrary to appearances, obtaining a loan for a new business is possible. Although most banks still require running the company for at least 12 months, already now some institutions decide to grant loans immediately after the official registration of the company. Actions of public institutions involved in supporting entrepreneurship have a great impact on this tendency.
Loans of this type are granted both by banks focusing on corporate services and large universal banks. In some cases, however, the lender may expect additional security or a guarantee. The required documents may also include a business plan that will help analysts assess the prospects for business success.