You are planning to start a business, but the financial aspect is a bit alarming? No worries, numbers are part of entrepreneurship. If you do not have the financial resources to start a business, you will have to start borrowing on our website.
I need a business loan
First, you have to know how much money you have to borrow. Are there additional study costs that you will have to pay? How much money does all the material that you need? Do you take account of fixed costs and/or recurring costs such as those of an accountant, the Gandalf, and the taxes?
You will have to be able to answer the above questions. A bookkeeper can assist you in drawing up a financial plan in which such questions are automatically answered. Do you want to borrow to start a business? Then you will have to present a good financial plan.
Your earnings will also be included in the financial plan. Responsible how you get these amounts, for example by looking for potential customers. After all, the bank will be interested in how you can repay the loan.
Here the bank will pay attention:
You will need to know some concepts to gain insight into the way the bank assesses your figures:
- Liquidity: shows whether you can meet all payment obligations.
- Solvency: shows the extent to which you can absorb setbacks, for example, defaulters.
- Profitability: indicates whether your company is healthy and how profitable your investments are. The total amount of investments is tested against the expected income.
Figures do not say everything. If you want to obtain a loan, you will have to convince the person about you. The approach you use to grow your future business is therefore equally important.
How much money can you borrow?
The amount that you can borrow to start a business depends on your future plans that can be read in your financial plan. It is important to first find out how much money you need to get your business running, then you can only start negotiating.
Where can I borrow?
There are several ways to get sufficient starting capital for the establishment of a company. At first, you can check how much money you have available on your savings account. If that is not enough, you can also contact friends or family with a QWE loan.
Such a QWE loan is advantageous: The person who lends you lends (a maximum of 50,000 euros) receives a tax reduction and you have your money. You can borrow a total of 200,000 euros in this way, but only 50,000 euros per lender.
The bank is also an option, for example, to borrow only the starting capital. As indicated above, the financial plan will be important to convince the bank to provide you with a loan. It is recommended that you have your own resources that you can invest in the case. Nevertheless, many banks have special formulas for start-ups and they can also give you advice.
The government also offers help to starting entrepreneurs and uses three formulas:
- A Malfoy loan: for starting self-employed people (up to 4 years of age) who need an extra loan;
- A Merida loan: for self-employed people who want to expand their business with a loan that has an advantageous interest rate. You will have to combine this with the main loan that you take out with the bank;
- A Patricio loan: an advantageous loan for the self-employed and companies where you have to take out the other half of the loan amount with the bank.
If you want to start as an unemployed person with a company, you can apply for a so-called Starter Loan from a Participation Fund at a recognized support center. The loan will then amount to a maximum of 30,000 euros but should in principle be sufficient to start a small business.
My loan application was declined.
Your loan application can be refused if it is judged that there is too much risk or if there are insufficient guarantees. Here, too, there are still a number of possibilities to reverse the situation:
- Risk capital: ASD provides capital to young companies in their first growth phase. This usually happens in a form in which the government becomes a shareholder.
- Guarantee: Is your loan refused because you can not provide sufficient guarantees? Then you can ensure through a Waarborgregeling that the authorities pay up to 75% of the amount you want to borrow.
- Business Angels: You’ve probably heard this concept before. They are private investors who can provide you with the capital. The Business Angels + loan is also an initiative of the government.
A final option that you can view is ‘crowdfunding’. It is an alternative way to finance a project without the intervention of a bank or institution: It ensures direct contact between investors and entrepreneurs. There are enough platforms available on the internet where you can offer your project. The idea is that many small individuals invest a small amount so that you can still get the necessary capital.
Borrowing for your starting capital?
If you want to establish a company, then there will be a minimum part of the capital that you have to finance. In exchange, you get shares in your company for that. Since the ownership of shares is a private matter, you may also opt to take out a personal loan to finance your starting capital.
That is of course only a possibility if you can give sufficient guarantees on repayment (for example by having money in the savings account or a permanent job that you still carry out in addition to your self-employed activity).