SME Loan – Finance your business comfortably

Getting loans for SMEs is not as difficult as before. In the current financial market you can obtain financing for small and medium-sized companies , which is much simpler thanks to the emergence of private equity companies and new participatory financing platforms that grant fast and comfortable SME loans.

 

ALL YOU NEED TO KNOW:

  • What are SME loans?
  • Where can I apply for a business loan?
  • General conditions for contracting SME loans
  • Learn 5 tips before asking for a business loan

What are SME loans?

Image result for sme loan

Loans for SMEs are loans that small and medium companies can contract to finance their operations. Although they receive this name, in reality SMEs can get both loans for companies and lines of credit, as well as other financing products designed to cover more specific needs (advances of invoices, discounts of promissory notes, etc).

When the crisis began, the conditions to obtain financing became much more rigid, which translated into a closing of the credit tap by the banking entities. Many companies that needed liquidity saw banks deny them access to money. This meant the closure of many companies and those that managed to survive had to look for alternative sources of financing . Because of this situation, many private equity companies and financing platforms emerged, such as P2P, with which companies obtained the capital they needed.

The variety of offers of this type of financial products is very broad. For this reason, before hiring a loan it is advisable to use a comparator to compare all the options available in the market. In this way, we can get the loan that best suits our needs and economic circumstances.

 

Where can I apply for a business loan?

Mainly, SME loans can be obtained through three different types of entities : banks, private lenders and participatory financing platforms (also called crowdlending platforms). In the first case, it is advisable that we turn to the bank of which we are clients, since they will know the situation of our company and can offer us a loan for SMEs that suits the needs of our business.

On the other hand, if we do not meet the requirements to access loans for small and medium-sized companies of our bank or do not convince us of their products, we can request financing from private equity companies or through crowdlending platforms. Below, we show the main options to which we can access:

  1. Banking entities : it is recommended that our first option is to go to our bank in search of financing. This is because they know our situation and have a track record of our history, which can help us achieve better conditions. In addition, the application and grant process will be faster since the bank will have all our data and we will not have to waste time in paperwork.
  2. Private equity companies: currently, there are several private equity entities that offer fast online loans specific to companies and SMEs. The great advantage of these products is that we can request them comfortably from home, without having to submit huge amounts of paperwork and that do not require us to be customers of the bank.
  3. Crowdlending platforms : through P2P loans, we can get the financing we need without having to physically move to any office and with a totally online process. In these platforms they get in touch: on the one hand, people who want to obtain financing, and on the other, people willing to finance projects to achieve profitability.
  4. Loans from the Ministry / State : if we need large amounts of capital for our company, we can use the financing offered by government entities, such as ENISA or the ICO Lines (Official Credit Lines).

If we are self-employed, we can also request loans for freelancers to finance our business, both in P2P platforms, banks or private equity lenders. It is important that we keep this option in mind as we can get products that provide us with more benefits.

 

General conditions for contracting SME loans

There are many different entities to which we can go in search of a loan for our company, so each of them will require us to comply with certain requirements, which may also vary depending on the type of product we request. Generally, these are the conditions that we will have to meet in most cases:

  • Our company must be registered in Spain.
  • We must have a sufficient annual income . They will ask us to comply with this requirement to make sure that the company has a solvent profile.
  • The company must enjoy a minimum time of seniority . They will ask us this in order to analyze their history and make sure that it is consolidated, normally they are usually at least 12 months.
  • It is important that we are not registered in any delinquency file such as ASNEF or RAI. The company that will finance us will analyze our credit history to verify this.

Fulfilling these requirements, we will not have any problem in accessing the financing we need. However, we must bear in mind that each type of credit for SMEs and freelancers will require certain requirements, depending on the purpose and amount requested. In turn, the level of billing of the company will be another aspect that will be taken into account when granting more or less financing.

 

Learn 5 tips before asking for a business loan

Learn 5 tips before asking for a business loan

When we apply for a loan for SMEs, our goal should not only be to obtain the financing we need, but also to try to obtain it at the best price. To find the loans for SMEs with the best conditions, we recommend doing the following:

  1. Do not wait until the last moment of desperation to apply for funding . We have to start informing us with a margin of time in advance. Thus, we will avoid hasty choices and stay with the first option.
  2. Request financing from several lenders at the same time to be able to compare and have a “b” option when one rejects us.
  3. Always ask for the commissions that they will charge us and for the possible costs of connection, beyond the interest rate.
  4. Propose a realistic payment plan but without being eternalized , since time is the factor that makes a loan more expensive.
  5. Request a binding offer or pre-contract and read it carefully to know what we are committed to and ask again everything we do not understand. Remember that the contract of a loan will condition our economy over the next few years and that I have better informed we are, our actions will be better.

If we follow these tips, we can probably get a good loan for our company. That is, optimal conditions that allow us to perform the actions we have in mind, comfortably and paying as little as possible, in terms of interest.

 

Bank of Spain intervenes Banco de Valencia, which allocates 3,000 million between capital and liquidity

Image result for banco de valenciaThe Bank of Spain has intervened Banco de Valencia, an entity integrated in Banco Financiero and Savings (BFA), and has allocated 3,000 million euros of public money, 1,000 million to strengthen its capital and 2,000 million line of credit to ensure its liquidity, according to the regulatory body.

The Bank of Spain has replaced the bank’s administrators at the request of its board and will administer it “to stabilize and recapitalize it” in order to face its subsequent sale in a competitive process.

With this objective, the Fund for Orderly Bank Restructuring (FROB), a body dependent on the Bank of Spain, has subscribed the bank’s capital for an amount of up to 1,000 million and has granted it a line of credit of 2,000 million to ensure its liquidity.

Depositors and creditors “can be absolutely calm, since the decisions adopted today guarantee that Banco de Valencia will be able to continue operating normally and will comply with all its obligations vis-à-vis third parties,” says the Bank of Spain.

The decision of the executive committee of the Bank of Spain is made after finding that the Bank of Valencia has not been able to take the appropriate measures to ensure its viability, and after recently sending a letter to its managers requiring an “urgent and definitive” solution for its situation.

The board of the Bank of Valencia formally expressed this Monday to the Bank of Spain the impossibility of finding immediately a viable solution for the future and requested the replacement of its administrators by others appointed by the FROB.

The weight of Banco de Valencia in the Spanish banking system is 0.74% of the total assets, according to data handled by the body chaired by Miguel Ángel Fernández Ordóñez.

THE FOURTH INTERVENTION

It is the fourth financial institution that has been involved by the Bank of Spain since the financial restructuring began, following Caja Castilla-La Mancha (CCM), Cajasur and Caja Mediterráneo (CAM), and the second in the Valencian Community.

Banco de Valencia, which registers a high exposure to the real estate sector and could require provisions for between 600 and 800 million euros, was preparing a capital increase to strengthen its solvency.

The entity has undergone changes in its top management, as José Luis Olivas, current vice president of BFA and vice president of the Bankia subsidiaries, recently left the presidency of the entity, now piloted by Aurelio Izquierdo.

CC.OO. ASK BFA TO BE INVOLVED

In fact, CC.OO. it had claimed BFA, which controls 27% of the capital of Banco de Valencia, to be involved in the problems of its subsidiary and to contribute 300 million euros to the capital increase prepared by its investee.

The Government already contemplated last week the possibility that the FROB would contribute capital to the Bank of Valencia if the intervention of BFA was insufficient to cover the deficiency of funds detected by the inspection of the Bank of Spain.

At the same time, the investment bank Lazard was probing buyer interest for Banco de Valencia in the Spanish financial system, an operation that would allow BFA to divest itself of a participation that it considers merely financial.

Banco de Valencia had requested from the CNMV a postponement to present the accounts corresponding to the third quarter of 2011 due to the fact that it was preparing a financial plan and planned to include it in said accounts.

The entity justified this request to the supervisor who was working on a capital increase to strengthen its solvency, and wanted to transfer its diagnosis of the situation to the accounts for the first nine months of the year.

 
 
 
 
 
 

Barcelona begins to shape its controversial local currency

Barcelona begins to shape its controversial local currency

Barcelona City Council has set the next half year to carry out the dissemination and design of the future local currency for Barcelona, ​​which could be defined in the spring. A controversial tool -which has the opposition of the Bank of Spain, which a few months ago described it as “impossible as well as undesirable” – whose main objective will be the economic promotion of small and medium-sized businesses and whose content draft seems to be working specialists of the Universitat Pompeu Fabra. From the outset, we work with a concept of digital currency , more operational and less expensive than the paper currency that, among other functions, serves citizens and merchants to buy and sell and that the money stays in the city.

Currently there are many models of local currencies in the world

<br /><br />Currently there are many models of local currencies in the world

although the Barcelona City Council has set itself successful projects such as Bristol (England), Nantes (France) or Sardinia (Italy), each with its idiosyncrasy, as a point of departure for the development of an own model. However, they are aware that before talking about the model to the merchants, the main stakeholders, we will have to explain what it is and what advantages it will bring. “We are going to open a pedagogical process in Barcelona to see which modality can be implemented, explain the proposals that are currently working and create the context so that it can thrive.” It is a mid-term process that society has to make its own. and the administration give their support “, explains the commissioner of Commerce, Miquel Ortega, aware that they still do not have the favor of the commercial sector, very foreign to this type of initiatives. Consulted sources of Finance and the Bank of Spain did not want yesterday to make comments yesterday on the initiative. The lack of specificity of the proposal puts it in a kind of legal limbo. The absence of financial intermediaries in the project and the uncertainty about its scope make it initially difficult to approach.

Oblivious to this situation, the City Council continues working on its currency -whose name will be chosen through a participatory process- it will be digital and will be operated through electronic wallet cards or mobile devices. The physical currency is only provided from a symbolic point of view and even as a souvenir for tourists, who are not discarded as future users. “It would be about making them enter the circuit in a simple way and that would give them an added attraction, that shopping in Barcelona with the local currency would be another element of the city’s identity,” explains Ortega. Like the rest of the local currencies in operation, their value will probably be comparable to that of the euro and can be changed back to the official currency at any time. With it you can pay for purchases at partner stores – the whole project is voluntary. Consequently, sales will occur locally, boosting internal economic activity and preventing the new money from leaving the territory, as is often the case with official money. But in order to compensate its use to the citizen, a system of advantages and bonuses in the shops must also be created.

The key to the success of the implementation of any local currency is that it is a city project.

<br /><br />The key to the success of the implementation of any local currency is that it is a city project.

It can not be just the plan of a mayor, because when she leaves, the proposal will go with her, and here there is enough critical mass for it to prosper,” says Andreu Honzawa, expert on monetary diversity and representative in Spain of the Dutch foundation Social Trade Organization (STRO), the first organization that specialized in local currencies, more than twenty years ago. For this reason, the City Council is now working on the preparation of pedagogical materials and specific guides for traders and neighbors, as well as workshops and workshops that will be held in the coming months. The feasibility of paying certain subsidies through the currency, as well as certain taxes and services such as public transport are also studied. The objective is that the citizens trust in this new money and use it. A coin that, in no case comes, to replace the official. In fact, and in spite of the comments of the Bank of Spain and the Treasury, the experts warn that whenever a new currency is created, the monopoly of the European Central Bank is threatened, there will be no legal impediment, especially if the experiences take place in small territories.

While Barcelona is now beginning its journey towards its own local currency, Santa Coloma de Gramenet has taken the lead and in all likelihood will be the first municipality in Spain to establish it. A currency with which you can channel part of private spending towards the flow of local commerce. According to a study, 75% of the purchases of their neighbors are made in other cities. With the new digital currency “the spending will be loyal,” says the mayor, Núria Parlón, who foresees that the initiative will be fully operational in the first half of 2016, once the public ordinances are modified at the end of the year and the process of participation to choose the name.

Santa Coloma is also a digital model that will incorporate a rechargeable credit card type identification and will allow those who adhere to operate in the city with a payment system over the internet and through mobile devices. Even municipal workers may receive a maximum of 30% of their salary in local currency. Grants to social and cultural entities can also be paid with it. The initiative is part of the European project Digipay, through which the Consistory has received a grant of funds of 132,000 euros. The digital currency will allow the payment of some taxes, such as the IBI, to those businesses that join the initiative. For later there are other proposals such as obtaining microcredits or loans, which for now are not foreseen, “since there is no bank entity” that participates, reveals the mayor. Merchants and restaurateurs welcome the initiative.

The establishment of parallel local currencies began in France in 2010, due to the behavior of the financial sector and as an alternative to the false accounting of growth. The pioneering city was Toulouse, where the sun-violette began its journey in 2011. Four years later, Jean-Louis Ortiz, president of the Faubourg Bonnefoy merchants’ association, which groups 80 shops in that area of ​​the city, confesses completely ignore the local currency: “None of my associates manages it, but I find it interesting, especially for small towns”. In Toulouse there are about 200 shops involved in the sun-violette network; Delicatessen, bookstores, printers, health professionals … “70% of the activity in the local currency is carried out in the food sector and there is 40,000 euros in that currency,”

explains activist Camille Pascual. The sense is to promote local commerce

 

an economy that respects people and nature, and resist the asphyxiation caused by large stores, he says. A coin, in short, with an added value to the mere exchange value. Florian Belmonte, a Toulouse plumber, has entered the circuit of the local currency that most inhabitants ignore or ignore. Belmonte admits that he has some “accounting problems” and says that it does not have much impact on his activity, but he has embraced the initiative. He has received his first local coins as a tip. The short-term objective is to leave the circle of the “convinced”, consolidate a digital support parallel to paper to facilitate exchanges and enter the services sector; museums, transports, municipal swimming pools, et cetera.

The example of Toulouse has been exported to other cities. Nantes introduced its currency in April, the sound card, a red card that was launched with 150 adhered businesses and aims to reach 3,000 shops and businesses and 10,000 people, 10% of the city, in four years. In Strasbourg, the stück has just been born, with 50 shops attached since the beginning of the month. In Lyon, where the driving group began its activity in 2010, inspired by Toulouse, the local currency, the gonette, will be launched on November 7. Rafael Poch