Small business owners are often start-up entrepreneurs who have taken the step into self-employment. One step, of course, is to succeed in times of economic instability and courage.
But it can also be a bit of patience required, namely, if you want to apply for a loan for small businesses. This could be necessary, for example, to turn the small business into a larger company. Similar to other self-employed banks eye such a project skeptical view, which often results in a rejection of the credit request.
What are the chances at the bank?
Nevertheless, credit inquiries at the bank can be crowned with success if the conditions are right. What will be required for almost every application is a business evaluation in which the company is thoroughly tested. Some business people may not like the idea at first glance, but this approach also offers its advantages. Employees of the banks are well trained in finding vulnerabilities that they themselves may have overlooked.
It examines various company key figures that allow conclusions to be drawn on creditworthiness. These include, for example, cash flow and sales figures. If the business evaluation is positive, a credit for small businesses may be expected. Which loan amounts may be considered as maximum, is differentiated on a case by case basis and is not least a question of the collateral, which can be additionally contributed.
These include, for example, a property that is owned by the applicant. For example, a land charge can be taken on a property or a house, which can be used to secure the credit for small businesses. Whether the borrower agrees to this endeavor is, of course, another matter. For if it concerns the pension or the home of the family, you would prefer to risk nothing for understandable reasons.
The credit line
A loan, which is also suitable as a loan for small businesses and granted much faster, is the credit line. This can be used to bridge short-term sales fluctuations or sales slumps. He is also very suitable as a seasonal loan. The handling of the dispo credit is quite simple: A conversation with the bank is usually already rich, to enable the Dispo. After that, it is possible to keep the checking account with the bank in order. How far the borrower can go “below zero” depends on the agreed credit line.
This line is an essential feature and is calculated from the regular or average income that accrues to the checking account in the month. The bank wants to ensure that there are enough funds to repay the credit for small businesses in good time. Both the claim and the repayment are very flexible. No previous signups are required if a sum is needed that will allow the account balance to slip into negative territory.
The disadvantage of the credit line, however, is clearly in the interest. It is much more expensive than a normal installment loan and should therefore be used only for a short time. Also, the loan amount is subject to restrictions, because the credit line usually corresponds to two to three times the regular income. For investment in fixed assets, this variant is therefore not suitable, since fixed assets should always be financed long term. This makes it possible to finance working capital very well, since it is precisely here that the ability to react quickly to fluctuations in sales is particularly important.