10 Facts About Financing For Entrepreneurs

These are some truths that you should know if you are looking for a loan for your business.

  1. You will start with your own resources:It is more viable to obtain a loan when the business is already underway, since there are almost no institutions that risk giving money to projects that are about to start, with an uncertain future. Seed capital is scarce in the country.
  2. You must show that everything is going well:You will have to convince the financial institution that you will pay the loan, because your business is profitable, that is, it has sales, supply security with suppliers, and can attend to its production.
  3. The credit should be convenient for you:You will have to do an accounting of what it would mean to pay the fee and interest rates; If despite these expenses, your business continues to make a profit, credit is convenient for you. Otherwise, it must be rejected. In any case, look for a partner or an investor, not financing.
  4. You will compare different options: Look at the interest rates, commissions and the type of guarantees that they require. It also takes into account the quality of care, that it is a place where you feel comfortable with the treatment and attention they give you.
  5. You will need advice:Either from the financial company that you approach or from a specialist in the subject, but unless you have financial training, it is best to request help to prepare your business for credit.
  6. There are preferences: The less risk a business involves, the easier it will get a loan. For example, a restaurant could be considered less risky than a production house.
  7. Franchises are favorites:Since they are “proven businesses” there are more credits for them.
  8. Reading and asking is basic:Understand the contract and solve all your doubts before signing it.
  9. It is better to ask for help on time:If you foresee a delay or incomplete payment of the credit, you must notify the financing source in time and demonstrate willingness to pay.
  10. Golden truth:In a business, credit is used to generate more wealth. That is good credit.

What you should know…

There are 2 types of basic credit for businesses :

  • Working capital: This financing is used to buy something that the business needs and is paid as soon as the sale of the good or service is made. Sure, with your due interests. They are generally credits to be settled in the short term
  • Fixed assets: Used to buy durable goods for the business. They are usually paid over several months and in installments, with interest.