The recourse to external financing through a loan should not be synonymous with the fact that we have run out of money and that we are in a state of need. Everyone, during some stage of their life, is going to need to have recourse to this financing formula from others and it is just what we are going to talk about in this article, about loans: for what and why to ask for them.
Why ask for a loan
You have to go to the financing of others through a loan when we have an important project that we want to move forward and it turns out that we need more money than we have at that time in liquid form to be able to move forward (we can have real estate, land or various properties but not enough cash at a certain time and these properties can serve as a guarantee to grant us a loan). For that reason, many times, it is often said: “you must, you are worth it” because banks usually grant more credit to those who have more wealth than to those who do not, since such patrimony guarantees these credits in case of default.
But the question to answer in this section is: why ask for a loan? And I can think of several reasons to apply for a loan, but there may be infinite, here are, by way of example, 10 reasons to request a loan:
- To start a new business investment project.
- To expand or expand internationally to a company.
- To buy a property, transport elements or expensive machinery.
- To study a Master’s degree abroad or studies that cost a lot of money.
- To finance the currency.
- To regroup many credits in a single loan.
- To finance the payment of taxes.
- To finance reforms in real estate or a purchase of important furniture.
- To finance agricultural or seasonal campaigns.
- To finance a business trip or to attend an international exhibition.
Be that as it may, the most advisable thing is that we do not borrow more than is strictly necessary , since the loans have to be repaid and they always have associated expenses and interests that must be paid in addition to the principal. We must make budgets and be very clear about what our future treasury flows are going to be so that we can be sure that the loan will be returned without problems. You have to write down your amount, your repayment term, the payments of the installments with your respective interests and put it together with the rest of the payment commitments, in order to have a global image of the cash flows and future cash payments.
Another premise that we have to keep in mind is that we only have to borrow for investment, not for consumption , although this rule is not fulfilled by everyone, unfortunately.
Why ask for a loan
The main reason is because we need outside resources that, at the time of carrying the project forward, we do not have them at our disposal and that is why we have to resort to external resources. You can say it in a thousand different ways, but the essence is this, there is no other, we need money and we look for someone to lend it to us; that someone can be the traditional bank or a Crowdlending company that will study our financing request and if everything is good it will be taken to your Marketplace so that all investors can see it and can invest in such financing. Once 100% is covered, the interest rate will be fixed and we will sign the loan through a loan contract that the Crowdlending company will prepare and that will make us sign before entering into our account the loan money.
How to get a loan
If you are a newly created company, you have to present a good business plan very well done, with a good marketing plan and a very elaborate market study. You should also submit a credible financial plan with good treasury forecasts (in an optimistic, pessimistic and realistic way) and you should also present annual pension accounts for at least three years. All this must be presented in a global and unitary way, without fissures, because, if not, the bank will give you a no for an answer.
If it is a company with a track record and you are looking for a loan to finance your activity or for the purchase of a fixed asset, the company must have a good record of payments and it should not appear in any delinquent registry (of the RAI or ASNEF type) either It must have legal incidents and must present positive results in its latest annual accounts, it must also have a certain seniority in the main activity and it must also be able to demonstrate its solvency and good repayment capacity. Finally, you must state the reason why you are requesting the loan and how you will repay it, as well as presenting a proforma invoice or a budget where you can clearly see how the loan money will be invested.
Advantages of applying for a loan through Crowdlending.es
Enter CROWDLENDING.ES and subscribe , we will help you find the best loans to invest through Crowdlending and we will advise you to see the great advantages of this new type of financing and investment that has come to Spain.
Here we show you some of its main advantages:
1.- A saving of financial costs and time . Funding by Crowdlending has the advantage of being cheaper than traditional financing, nowadays bank loans are being made with double-digit interest rates, while by Crowdlending, if the company is solvent, financing can already be found to a 3% or 4% per year, and even less, and for companies with moderate risk, financing can be found by an average of 6% or 7% per year. Crowdlending companies do not charge anything for the solvency study, nor for publishing the application of the company in your Marketplace and do not charge anything for early repayment and, finally, do not force you to hire other financial products to grant financing, such as if they tend to do almost all traditional credit entities. Investors also earn good interests and thus everyone is happy, this is a kind of “win-win” relationship in which all the parties involved win.
2.- Greater speed in the granting of the loan and in the processing of it : The most complicated is the solvency analysis phase of the company that requests financing, but if it passes without problems, the rest is very easy: it is published the financing request in the Marketplace and when the investors have subscribed one hundred percent of the requested amount, then the Crowdlending company already takes care of everything else: of transferring the money to the company, of writing and signing the contract of loan from the developer and collect the fees from the borrower and deposit them with the small investing lenders.
3.- Greater flexibility in the amount of the loan and in the amortization period. Both the amount of the loan and the repayment period is set by the developer requesting the financing, the Crowdlending company can advise on what is best for the company, but it is this, ultimately, who has the final decision on these elements. And the same goes for investors, they are the ones who have the final say on what interest rates are willing to lend their money and on whether to invest in a certain loan or not.