Apply for & take out a business loan ᐈ Borrow money as a starter

Starting capital is required to start a business. It may also be that capital is required for investing. As an entrepreneur you can borrow, apply for and close business money for your company in various ways.

Apply for a business loan with a purpose

Apply for a business loan with a purpose

In preparation for applying for a business loan, it makes sense to ask himself what he needs the loan for. A business loan can be used, among other things, for the following purposes:

  • Financing the purchase or renovation of your own business premises;
  • Financing the layout of the business space;
  • The purchase of company resources, such as company car and machines;
  • Financing the stock;
  • Hiring extra staff;
  • Purchasing new computers and software;
  • Refinance an existing loan.

A business loan can be used for all kinds of purposes. In most cases, a lender asks the entrepreneur for which he will use the borrowed money. The answer to that question also gives the entrepreneur an indication of the amount to be borrowed. The purpose of the loan also influences the desired flexibility of the loan. With a loan you can choose a fixed term, or a more flexible loan, with the option to repay the loan and to withdraw money.

Distinction between business loans and business loans

With a business loan, a distinction is made between a fixed variant of borrowing and a flexible variant of borrowing. The fixed variant of business loans is a loan and the flexible variant of business loans is a credit. With a loan, an entrepreneur repays the loan amount by repaying a monthly amount. In the case of a loan, repaid amounts can be withdrawn within the limit agreed with the lender.

The possibilities for entrepreneurs

  1. Business loan: This is the fixed variant. The borrowing party receives the loan amount on its account. The loan is repaid to the bank by a fixed monthly amount during the term of the loan. The amount is determined by repayment and interest. Interest is paid on the outstanding amount.
  2. Business credit : This is the flexible variant. A special amount is available for the borrowing party in a special account. The entrepreneur can make flexible use of this amount. Amounts can be withdrawn or deposited. Repaid amounts can be withdrawn. Interest only needs to be paid on the amount withdrawn.
  3. Stock financing : A company often has stock. With the credit form stock financing, entrepreneurs are given the financial space needed to purchase extra stocks. This is a short term business loan.
  4. Factoring : An entrepreneur can choose to finance the turnover. This is an option if invoices sent are not paid on time. Due to late payments, no investments can be made. With the option of factoring, issued invoices are largely advanced by a factor company.
  5. Microfinance : Microfinance is often chosen by starting entrepreneurs. They need a small amount of money to achieve their plans. Banks often find these loans too risky. That is why there are providers of microcredit. Entrepreneurs can borrow a small amount from these providers.
  6. Starter loans : Starting entrepreneurs are generally seen by banks as too high a risk. The start-up entrepreneur cannot borrow money from many other lenders, because those lenders, for example, only finance entrepreneurs who have had a company that has been in existence for several years. Nowadays there are options for a starting entrepreneur to borrow money, namely from the UWV or from the municipality. This can be done on the basis of the aforementioned microcredit, or with the MBK Credit Guarantee Decree (BBMKB).

In some cases, you start your own from a benefit, such as unemployment or social assistance benefits. Financial support from the UWV or from the municipality is available for this. Microcredit is also an often chosen option. Those who have a good business plan may be able to borrow from private individuals. Entrepreneurs with little collateral may also be able to rely on the ‘Guarantee for SME loans’. The government will then partially guarantee when the novice entrepreneur takes out a loan. This increases the chance of qualifying for a loan.

Apply for a business loan

Apply for a business loan

Nowadays a business loan can be applied for online. All you need to do is complete the application form from the bank or from another lender. The lender will submit an offer within 24 hours. Does the entrepreneur agree to the offer? Then he signs the quotation.

The borrowing party can then immediately dispose of an amount. Proper preparation is necessary for a smooth online application for a business loan. For example, the lender wants to know who the entrepreneur is, what it needs the loan amount for and how it repays the loan amount. Information frequently requested by the lender:

  • Data on the financial health of a company: annual figures, the income tax return of the past year and bank transactions of the past months.
  • Information about the investment: for example, a valuation report of the commercial property to be purchased.
  • Other data (sometimes): order book, stock of finished product, debtor overview and a business plan.