Starting a business is not a decision to be made lightly . Or at least it shouldn’t be if the adventure is to be successful. In fact, the first step you have to take is to ask yourself if you are ready, -for this we recommend taking the TEST: Do you have the wood of an entrepreneur? -. After making the decision to start an entrepreneur, many days come to think, to think about an idea that at times seems the best in the world and at times the worst. Hours and hours of doing projects, business plans and numbers . Many numbers to see if the capital available is enough to start the business. If the answer is no and financing is needed, a good way to get it is entrepreneur loans.
According to the 2017 Barometer of the ATA Self-Employed Federation, three out of ten self-employed workers , 36% of those surveyed, went to a financial institution in 2016 to ask for money . Of these requests, 66% were granted funding. 50% received the amount requested while 15% got less than what they had asked for. The percentage of requests denied was 21.6% , a figure lower than the 36.6% in 2015. The remaining 12% did not answer in the study whether they obtained funding or not, possibly because their cases were still under study.
Here are the top 7 Loans & Borrowing tools for Entrepreneurs:
Loans for entrepreneurs in banks
Most banking entities specifically have loans for the self-employed and each one sets its conditions and interest rates, so it is convenient to check what each one offers at the branches. What can be pointed out are the most common elements that you will find when applying for one of those loans for self-employed entrepreneurs.
Some are the same that are required of any client who goes to a bank to request a loan, such as not appearing on a list of defaulters , the level of indebtedness that they will have if it is granted or the relationship they have with the entity, if it already has contracted other products such as insurance or pension plans. If the bank sees any risk in the operation, it may also ask for personal guarantees or a guarantor.
When applying for one of the loans for entrepreneurs, it is convenient for you to have the following documents ready because they are the ones that financial institutions usually ask for. The business plan , the budgets of what you plan to acquire to start the project, tax return, operations that you have with other financial entities if you have them, the self-employment registration , the proof of payment to Social Security. If you already have a company, it is likely that they will ask you for its accounting status, its seniority and the worker contracts if you have them.
TYPES OF LOANS FOR ENTREPRENEURS
Personal or business financing
Today it continues to be the most widely used financing route and is usually done through traditional banking entities . The bank will provide the necessary credit and the conditions will be determined by the entity according to the solvency of the company, the type of business, the guarantees, the relationship with the bank and other factors. In addition, online banking offers us a multitude of proposals that have arrived in recent years. It also offers the possibility of obtaining credit online and that, given its comfort and agility in the procedures , can be among our favorites if we need capital with some urgency and with the confidence of being the bank with which we usually operate.
Credits of public origin
The capital we need can also be obtained through public institutions belonging to the State . In this case we have several entities, but we are going to stick with the Official Credit Institute (ICO), known for its long history and for its famous ICO credits, which offer a series of advantages to take into account such as low and long interest rates repayment terms . To take into account as a negative aspect, there is the tedious bureaucratic procedure that it entails.
Financing through third parties
A very fashionable alternative lately to undertake thanks to the investment of third parties. Its use has spread among individuals and SMEs whose projects do not require, a priori, a very high initial capital. These are digital platforms where we can present our idea and which will manage the microcredits provided by family, friends and investors interested in our company. It is a really practical, comfortable and simple option that will allow us to make our dreams come true. In addition, we can attract potential investors, who will see that social support that our project has as an endorsement.