You want to become self-employed, work as a freelancer in the future or even start a company that employs staff? But the necessary capital for this big step is missing so far? Then, loans for start-ups are a good option. A dilemma: due to the lack of collateral and often even equity, which can be incorporated into the financing, the search for credit for start-up founders often complicated. We have summarized the most important tips and information for entrepreneurs in order to increase the likelihood of lending.
What aspects do I have to consider before applying for a loan as an entrepreneur?
Whether regional support program, favorable loan from direct and branch banks or capital from another place: In the first step, the desired sum inevitably decides who the right addressees are for your inquiry. For this, a financial needs analysis must first be established. At the latest you will ask prospective lenders before the lending, therefore you can answer the following questions for yourself at the beginning:
- What loan amount do I need to start up?
- What collateral can I show?
- What turnover after the foundation do I expect?
- Do I work alone or do I have to pay employees?
- Which running costs are to be dealt with in addition to the financing?
This is only a pre-selection of possible questions because of the often individual conditions of your foundation.
What else does a start-up founder have to consider?
Inexperienced founders, who can not estimate the future costs themselves, should seek external help from the tax accountant or various online portals. Finally, the effort starts well before the loan application and loan acceptance. At which authority do I have to register the foundation? What information would the responsible tax office receive? And which insurance policies do I have to conclude? These are just three of the topics you should consider before applying for business start up loans. Also, considering whether you need to purchase vehicles and implements (machines, PCs, laptops, cell phones, etc.) for larger sums or whether you need to rent extra space will affect the amount of your desired loan. Individual entrepreneurs who wish to offer digital services may be able to do so from the home office (do not forget to file for tax return!). But if, for example, you work as an artisan, you will need suitable workspaces and an area to receive customers on the spot, even if you will usually negotiate a potential contract award from partners or customers.
Entrepreneurs should plan capital buffers
Whether public funds or ordinary loans from banks that can serve as a credit for business start-ups: they need to address the needs they need. The fact that one or the other extra investment may be required during the start-up phase indicates that financing should not be underestimated. Here is a small difference to the private installment loan, in which experts often warn against excessive sums of money and monthly installments. To some more generosity will also advise reputable banks, in their interest is the scheduled repayment of loans. The reason for calculating a certain amount of leeway is that you will not be granted further loans after you have given larger loans to start-ups. Creditworthiness suffers noticeably from extensive financing. It can therefore make sense to select loans in which banks offer potential increases from the very beginning after a predetermined successful repayment period . This creates a degree of security in the event of unpredictable additional expenses.
Which loans qualify as loans for entrepreneurs
Decisive here is the need for credit. If you just need a new computer to get your ” little ” startup off the ground with a clever, but enjoyably easy to implement idea, applying for a business startup loan will usually be quick and successful. For here is enough a small loan or even mini loan of a maximum of 1,000 euros. Needless to say, you should also plan specifically here. Expenditures for advertising and advertising in print media as well as on the internet and the running costs for the operation of one’s own website (“hosting”), depending on the time and effort involved, are quite significant. The Internet and telephone connection is also on the list of operating expenses.
These must be paid even if you start by writing red numbers. The mentioned employee salaries and own private fixed costs should also be included in the calculations. Because the loans should cover all expenses until you can live on them.
As for the above zero-percent financing, the term primarily refers to purchases in retail or wholesale. These should be thought through, because many supposedly cheapest deals barely withstand scrutiny and reveal hidden fees. Better, you also finance the purchases of this kind with a proper loan, in which financiers make all charges transparent.
How long does it take to pay out the entrepreneur loan?
Digitization has also led to an acceleration of the processes at this point. However, it will take a few days to validate your start up loan application – especially if you’re applying for six-digit or at least high five-digit loan amounts. For direct banks and online loans of normal branch banks (yes, this industry is increasingly represented with online offers in the credit comparison), you get in financing in the amount of normal consumer loans up to a maximum of 50,000 euros or rarely 100,000 euros often an immediate addition. As I have said, this is provisional, as documents submitted and the accuracy of your information must be checked. If you are well prepared and have all the documents prepared, you can make an important contribution to a quick settlement. There are hardly any general statements about the duration of the examination and the time until selection.
Loans for entrepreneurs
Anyone who wonders what role the credit check on business start-up loans plays should be told: a big one . Because, of course, the approval of for small and large loans for entrepreneurs is mandatory. It’s a good idea to use the free self- assessment to check your credit rating before you make a loan comparison. Several negative entries in the register of and other credit bureaus will lead to the rejection of an application. Many consumers and companies do not exactly know the status quo of their creditworthiness and simply count on trouble-free transactions. For example, some founders are out of the blue when the test points to a bad credit score. Even if the lack of creditworthiness is likely to be the reason for rejecting an application, it is highly recommended that banks ask for the exact cause. While varying the definition of audit modalities between banks, feedback can be a great help in optimizing application documents, so you have better opportunities for future inquiries.
Which documents do I have to submit?
The relevant information for answering this question is, above all, the amount of loans and the types of financing that entrepreneurs want to use as loans for start-ups. A non-earmarked installment loan is mainly about creditworthiness, current personal income and the amount of the loan. Can you do with the money, whatever you want, there are actually no further documents. On a start-up loan, on the other hand, you should be prepared for requirements such as the following:
Asset statements are used to determine liability: If you have larger reserves, you can have a positive influence on credit opportunities. In the event that the financing is to take over the company, the lending bank will also ask for current balance sheets – usually for the last three years before application. The submission of business evaluations is also usually self-evident. If borrowers do not want to work as sole proprietors (self-employed or self-employed), banks will also require drafts of contracts that give information, for example, about leases, franchise conditions or the positions of different companies) , In short: banks want to know all the details relevant to the company founded. So you should not be surprised if banks ask in great detail for things that you may not even have thought of in your planning.
Loans for start-ups with guarantors and second-borrowers?
If you are afraid of rejection, you can take early precautions. Two approaches prove to be promising. If you can present a guarantor who is equally confident in your business model and ready to be held responsible in the event of an amortization default, you can significantly increase your chances of obtaining a loan. Co-applicants can equally positively influence the granting prospects if sufficient income and creditworthiness can be proven.