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When looking for a business loan, the first way usually leads to the house bank. If, however, this does not offer favorable conditions or rejects the request for the corporate loan due to the lack of collateral, the financing project does not have to fail. Because there are alternatives, from promotional loans to crowdlending.

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A business loan is used to finance entrepreneurial purposes such as investments, the procurement of resources or the settlement of other entrepreneurial liabilities.

Despite the interest burden, corporate financing with debt capital is normal for companies and the self-employed, because taking out a business loan has the following advantages :

  1. Financing necessary investments for the start-up
  2. Use of entrepreneurial potential possible
  3. Better chances of profit and a high return on equity
  4. Greater liquidity

To avoid loan defaults, banks only grant company loans under certain conditions. A regular income is unfortunately not given to entrepreneurs, as the income depends on the success of the company and can fluctuate greatly. That is why the employees of the bank check the business figures of past periods very carefully. In addition, collateral is usually required, which the bank can use in the event of payment difficulties.

If the loan request from the house bank was unsuccessful, it does not mean that no external financing is possible. There are alternatives like a new online payday loan that this article also presents.

Comparison: These banks offer the business loan

Comparison: These banks offer the business loan

In addition to the classic branch banks, many direct banks also offer business loans that you can apply for online. There are also providers who specialize in the so-called crowd trend, in other words, loan financing from several private individuals. Here too, obtaining a company loan can be straightforward.

With the offers listed in the table, note that the conditions for granting a loan differ. For example, some banks only offer business credit to freelancers and the self-employed, others only to companies that are required to report.

Financing with business credit: This is what companies have to pay attention to

Financing with business credit: This is what companies have to pay attention to

Various aspects are important when comparing loan offers. As an entrepreneur, pay particular attention to the following points.

interest rate

The interest rate is one of the most important decision criteria, as it determines the interest expense associated with borrowing. The effective annual interest rate is suitable for the loan comparison. This is calculated from the nominal interest, taking into account special repayments. In the past, fees also had an impact on the effective annual interest rate, but according to a decision by the Federal Court of Justice on July 4, 2017, banks are no longer allowed to charge these for business loans. However, agency fees may apply if you use the relevant portals.

fixed interest rate

For short-term loans, the fixed interest period is irrelevant since the interest rate normally remains constant over the entire period. With long-term loans, however, it may have to be renegotiated after a certain period. That is why it is particularly worthwhile in low- interest phases to agree on a long fixed-interest period when entering into a contract.

Installment loan or revolving business loan

With an installment loan, you repay the loan amount over a fixed period in constant or changing installments. These consist of a redemption component and an interest component.

A well-known example of a revolving loan is the overdraft facility. A credit line is agreed upon, which you can draw on as required. Interest accrues only for the amount used. Some business loan providers have specialized in this type of loan.

running time

With installment loans, the banks offer various options for structuring the term. Some only allow short-term loans.

The loan term affects the interest rate in most cases. Above all, it determines which rate you have to pay back regularly. This must not be so high that it limits your liquidity too much.

loan amount

The amount of the loan should depend on how much money you need. You usually do not get credit amounts in the six-figure range through direct banks or online portals. In this case, only the loan application via the house bank remains, possibly also as a promotional loan.

repayment schedule

The repayment schedule should also be based on your business needs. He can provide for a repayment-free period. He also determines when the installments are due and how they are made up of the repayment and interest components.

Unscheduled repayment

It is conceivable that you would like to repay the business loan ahead of schedule. Reasons for this can be a very positive development of your company or the possibility of debt restructuring with a cheaper loan.

Therefore, when taking out a loan, also note the conditions for the unscheduled repayment. In this case, banks usually claim the prepayment penalty.

Company loan: You need these documents to apply for a loan

Company loan: You need these documents to apply for a loan

Which documents you need for the loan application largely depends on the legal form and the size of the company. Before you start a credit conversation with the bank, ask what you should bring with you. Direct banks and online portals tell their website what information and documents you need to submit. This is often also possible online.

Most banks require this information and documents to process your loan application:

  • Company information: This includes the company name, legal form, and address. A short company portrait provides further essential facts such as the industry, possible investments, the number of employees, the annual turnover and the annual profit.
  • Information about the desired loan: Tell the bank what you want to use the business loan for, how high it should be and how long you can repay it.
  • Business documents: These include the annual financial statements (EÜR or balance sheet and income statement) and tax assessments from the past two to three years, current business evaluations and account statements from the past few months. Depending on the amount of the company loan, financial planning for the future is usually requested.
  • Personal data of the owner or manager: These include name, date of birth, address and ID number, which must be proven by the copy or presentation of the ID. The declaration of consent to the credit bureau query is also expected.
  • Business plan: You only need this if you apply for the loan as part of a business start-up.

Alternatives to classic business loans

The classic business loan through a branch or direct bank is not the only option for corporate debt financing. There are alternatives that you should know as an entrepreneur or managing director.

Credit from private (crowdlending)

Personal loans are based on the crowdlending principle. This means that the business loan is financed by many different private investors. In return, they expect a return that is higher than with traditional investment forms.

By dividing the loan amount into many small amounts, a loan default for private lenders would also be able to cope. That is why it is often easier to get a business loan without regular income and without collateral using such platforms. The creditworthiness is of course still assessed and influences the chances of the company loan and the amount of the interest rate.

The following platforms offer business credit from private through crowdlending:

  • Viloan – Our recommendation: With Viloan you can present your financing project anonymously to convince potential investors. Viloan sets the interest rate based on your credit rating.
  • creditend : Business credit from private through creditend works in a similar way to Viloan. Here, however, the interest rate can be negotiated based on a recommendation.
  • Zaikoo : Zaikoo works on the same principle and publishes your credit rating. The interest rate is freely negotiated.
  • Kimonatch : At Kimonatch, an algorithm ensures that suitable loan prospects and investors are brought together. You do not have to present your project and conditions negotiations are also not possible.

Guarantee banks help with collateral

If your loan requests fail due to a lack of collateral, the state guarantee bank can help you. These banks provide public guarantees to secure certain loans. In return, they receive guarantees from the federal and state governments.

Normally, the brokerage takes place through the house bank. You can also contact the guarantee bank directly.

Promotional loans from Intrasavings bank

The Intrasavings bank provides publicly funded loans on favorable terms. To do this, however, certain conditions must be met that correspond to the purpose of the funding. The goals are, for example, the promotion of new technologies or structurally weak regions. The funds are also subject to a purpose limitation, which, for example, does not allow rescheduling.

Depending on the respective loan program, you benefit from low-interest rates, partial guarantees or years without repayment. You can apply for a promotional loan from Intrasavings bank or another state development bank through your house bank.

Frequently asked questions about corporate loans

The following FAQ supplement the information on business credit:

1. Does the bank always ask for collateral for lending?

The basic principle is that the bank requests collateral if it sees a certain risk that the company could run into payment difficulties. In such cases, in which the borrower already proves in advance that its income from operating activities is consistently high and will probably continue to do so in the future, the bank generally dispenses with collateral.

2. What is typical loan collateral?

For companies, this is real estate, machinery, vehicles, and all business equipment, but also financial assets. For freelancers, the self-employed, as well as personally liable owners or partners, objects and assets from the personal area, can also serve as security.

3. What is the difference between credit and loan?

Loans with large loan amounts and longer terms are usually referred to as loans. Otherwise, there is no difference.

4. Does crowdlending always mean private credit?

No. In general, crowdlending means that many investors finance a loan. Most platforms work with both private and institutional lenders.

Conclusion on business credit

Many companies take advantage of the possibility of external financing in order to use the potential of the market properly. However, getting a business loan is not always easy, especially when there is no collateral. But there are alternatives.

When looking for a company loan, don’t just look at the interest rate. In order to be able to negotiate the conditions correctly, you need to carefully consider the financing needs of your company.

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