There are times when the entrepreneur needs to make a new investment in the company. Whether to promote some improvement or even get the finances in order, there are several types of business loan that can help.
There are several ways to apply for a business loan. The need and momentum of the company is that they will define which is the most appropriate.
Often, the expected money does not exist at the time of greatest need. Then the solution may be to seek a business loan.
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As important as knowing what types of business loans are available to the company, is identifying the ideal time to request what suits the need.
Initially, it is essential to have well established the purpose of the loan and the need of the company.
Having this outlined, it is defined whether a loan needs to be made quickly too, for example, hit the finances, or not. The loan may not be as urgent if it is, for example, to make non-emergency reform.
If the company does not have and will not have enough revenue to pay off the debt, it is worth rethinking. After all, the interest on a loan can be a problem for the company in certain situations.
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What are the types of business loans available in the market? How do they work?
Loans for companies
Regardless of the size of the company, the business loan is always an option for those who need extra money. Whether it is to solve what you need or even reach a certain goal, such as expanding business.
To start the conversation, it is valid to know that there are many credit products on the market. The important thing, however, is to identify between the types of business loan, the one that is best for your business, as well as the best time to apply for the loan, assessing the risks and advantages of each one of them.
Every company with a need
Corporate loans are granted by banks and financial institutions that have their own products and, consequently, different rules.
With so much supply, it is imperative that the entrepreneur conduct a good market research among types of business loan. Thus, it is possible to detect the product that best meets your need and of course your pocket.
Check out, from now on, the most popular products on the market.
Types of Business Loan
This type of loan is generally indicated for those who are looking to invest quickly in the infrastructure of the company. As an example we can mention an on-site renovation, the purchase of a machine or even the construction of a new space for the company.
But funding does not allow for much flexibility. This is a more limited product than the loan – when business credit is done, one should immediately identify where the money will be used.
But it is undoubtedly an investment modality that must be considered. Especially when the plan is to pay the debt with the own profit obtained by the use of the financed product.
Working Capital Credit
Among the types of business loans is credit for working capital.
To keep a company running, the entrepreneur needs working capital. This capital is commonly used to meet the basic needs of the company – payment of taxes, salaries, etc.
But many entrepreneurs still use working capital to buy machines or even to control the orderly flow of cash from the company.
To obtain this credit the business must be formalized and active.
Business check is also one of the types of existing business loans.
Do you know what the overdraft is ? The overdraft is a credit limit that is available in the current account to be used at any time.
Despite the apparent advantage of being able to be used in emergency situations, it has high interest rates.
Anticipation of receivables or discount of duplicates
Prepayment of receivables is one of the types of business loan that allows the entrepreneur to receive in advance the credit that would enter the account in the future.
It is, therefore, highly requested by those who aim to receive in advance the amounts that are billed monthly in the term sales.
This operation is simple and can occur automatically or when the customer wishes. It offers lower interest rates than other credit lines.
Here is a credit option for entrepreneurs in specific areas: agribusiness, cooperatives and farmers.
It has the partnership of BNDES – National Development Bank – to invest in the structure of the business.
The company applying for the loan goes through a credit analysis process. It also needs to present a technical project and justification for the use of value.
The credit is released in one or more installments. The payment can also be cash or installment.
Only banks and institutions that integrate the National Rural Credit System offer this modality. In many cases there is government incentive.
The business credit card can also be considered one of the types of business loan.
Just like the Individuals card, the Corporate Credit card is very simple to use and has an advantage. The company has centralized expense management. Thus, the entrepreneur has greater control of finances.
If payment of the credit is made at one time, there is no interest charge. But it is possible to split into installments as well – in this case there is interest.
Credit to MEI (Micro Entrepreneur Individual)
The credit for the Individual Micro Entrepreneur is mainly indicated to generate income to the business.
This is an incentive to accelerate the growth of the company with the purchase of raw material, the realization of a reform, etc.
It is not bureaucratic for those who are MEI and interest is usually lower. Either way, it only matters if you actually promote increased business revenue.
Loan with guarantee
Among the types of business loans, this product is suitable for those who wish to open or invest in the company, as well as those who want to make a renovation, buy equipment, etc.
It offers the advantage of low interest rates , since there is a guarantee of payment.
Where are the loans made?
Many banks offer credit products and each practices rates, limits and own values, in addition to the types of loans and financing.
Financial market startups are also options for those seeking lower interest and security.