We are living in a time where people are soon a bit scared to borrow money. They think that it is not easy to get money and that it is very expensive to borrow money to start a business. However, this is no longer true, that idea is really a thing of the past. Today it is actually very easy to borrow business money as a starting entrepreneur. Let’s see why applying for a business loan is so easy.
How to take a loan for small business online?
You can, of course, go to the bank to open a loan. This is the most obvious way to get credit. However, the disadvantage of this is that the bank sets quite some conditions for opening a loan. For example, it may happen that you cannot take out a loan with a normal bank. An alternative is therefore to use an online lender. That way you can get capital without too much trouble. These are very reliable online lenders who have been active on the internet for a long time. They are less likely to set strict conditions for obtaining a loan. This is therefore an ideal way to get credit as a young company. It is useful to do some research on the company where you want to borrow credit. You have to ensure that the company is well-known and that it is a reliable company. This way you ensure that everything runs smoothly.
Low-interest rate for a business loan
At the moment there is a very low interest rate, this is extremely beneficial for new entrepreneurs and young companies. The economy is picking up more and more and consumer confidence is increasing. As a result, banks are more likely to take out a loan for young entrepreneurs. The chance of success of the company is many times higher because consumer confidence increases. It is useful to get some information from the bank. They can give you more information about taking out the loan. Also tell what kind of business you would like to start and what your goals are, so the chance is even higher that you will get a loan.
Possible forms of credits
There are different types of business loans for both start-ups and companies that want to grow. But that is not everything. Stacking is nowadays the new trend of financing. This means that you will not only use a single loan but will combine this loan with
- Another additional loan for the self-employed
- Money from investors
- Money from crowdfunding
- Private investors
- Government grants
We call this stack financing.
What arrangements are possible?
In the figure below we provide an overview of possible schemes within startup companies and existing companies that want to grow
Requesting quotes for a loan requires a lot of time and energy. One can opt to use a central point of contact such as at bankr.nl, Leningmakelaar.nl
Crowdfunding: Borrow money from private investors
What is crowdfunding?
Crowdfunding is a way of borrowing money when, for example, you do not want to go to a bank or you cannot go to a bank. Even online lenders cannot grant you a loan. Even as a self-employed person it is sometimes very difficult to get a loan to finance your trade project. Then there is actually one more solution to be able to borrow a large amount. That is through crowdfunding. Through crowdfunding, you do not borrow money through the bank or another lender. No, you borrow money from private individuals. These individuals usually still have a piggy bank somewhere with money that they would rather have invested. Through crowdfunding, these people can invest money in projects they want and participate in the monthly profit that results from the monthly installments. Such loans are also referred to as peer-to-peer loans (p2p).
You can, of course, assume that there was a lot of headwind in the beginning from AFM (the Netherlands). For example, the Boober loan site was doomed to bankruptcy. Although the company was very popular, the concept was stopped. That has naturally led other companies to think. In the meantime, there are some companies such as Geldvoorelkaar and Zopa (British) who have managed to get a decent one crowdfunding to prepare a concept that satisfied the supervisory eye, in this case, the AFM. Unfortunately, Boober has opened the door for other potential money providers without much benefit.
What is crowdfunding a good idea?
It is, of course, a big advantage for the borrower. In addition, they are screened for the feasibility of their plan. They will also be followed somewhat better than other entrepreneurs who receive a regular loan from the bank. After all, it’s about the feasibility of the entire concept and the reputation of the crowdfunding organization.
The advantage of the private individual lending his money? They receive a high return per month… when the case does not go bankrupt it is obvious. So there is certainly a risk involved. You can check the risk percentage (indicated) per project, but it is already very clear that you do not have to put all your money into 1 project. It requires a diversified investment. Put your money into as many projects as you choose. Assume that some projects are canceled due to failure. When you get a net return of 6%, keep in mind that it is slightly lower on average. I would assume a 4% as standard so that I don’t end up with unexpected situations.
Examples of projects you can choose from:
1 = defensive (loan maximum 30% of the repayment capacity)
2 = cautious (loan maximum 50% of the repayment capacity)
3 = offensive (loan maximum 70% of the repayment capacity)
4 = speculative (loan maximum 85% of the repayment capacity)
5 = very speculative (loan maximum 100% repayment capacity)
Each project usually receives a De PD rating. A PD rating determines the initial probability of default to various characteristics. With the AAA and AA classifications, the probability of default is lower than average.
So don’t put all your money in such an investment. It remains a risky business. These P2P are connected to the BCR. If you do not pay, you cannot avoid getting a BCR listing.
So it doesn’t have to be that hard to get a business loan for a company. After all, we are living in an economically more favorable time than in 2008. The economy continues to pick up and banks are less reluctant to grant credit. Have you been thinking about starting a business yourself for a while then this is your chance? You can get credit very easily via an online lender without having to meet all kinds of conditions.