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?
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:
- 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.
- 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.
- 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.
- 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
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:
- 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.
- Request financing from several lenders at the same time to be able to compare and have a “b” option when one rejects us.
- Always ask for the commissions that they will charge us and for the possible costs of connection, beyond the interest rate.
- Propose a realistic payment plan but without being eternalized , since time is the factor that makes a loan more expensive.
- 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.