A business loan can be used to finance equipment to launch its activity , real estate to develop its business or meet a one-time need for cash.
There are different financing and bank loan solutions , all of which should be studied with your advisor in order to choose the business loan that best suits your needs and your situation.
To obtain a business loan, the crucial point will be to present a clear and convincing business plan to your bank.
In which cases can you apply for a loan for your business?
From the creation of your business and throughout its life cycle, your activity may generate financing needs requiring you to obtain a professional loan .
Whether you are a craftsman , trader or freelancer , these needs can be linked to:
investments in equipment for the purchase and renewal of equipment, the acquisition of professional premises to open an architectural firm , for example;
plans to develop your business by acquiring a new entity or a new point of sale for a restaurateur ;
discrepancies between your customer receipts and your payments resulting in an overdraft on your professional account : purchase of stocks for production/processing, deferred payment for certain customers as often happens with construction professionals , for example, etc.
whatever your type of activity or profession, these needs must be anticipated! Indeed, anticipating your financing needs is the guarantee of good accounting management: an essential element that the banker will look at before granting you a business loan .
What are the different types of financing?
There are different ways to obtain a loan for your business and the choice of financing solution will depend on the nature of the needs.
When you open an account for a micro-enterprise , you can request authorization for current account advances. This solution meets a need for cash for a given period of very short duration (fifteen days to one month). Their amount, duration and rate are determined in advance between you and your bank advisor.
The draft discount
The draft discount consists of an advance that allows you to dispose of the amount of a claim without waiting for payment. You give the draft to your bank for the pros against financing. If the debt remains unpaid on its due date, it will be up to you to initiate the recovery procedure.
Short-term cash loan
The short-term cash loan allows you to finance your one-time cash needs while waiting for a significant cash inflow. A bank that accompanies business creations can in particular grant it to you if your activity is seasonal or to support your activity during off-peak periods.
Recurring needs that require funding
To meet the cash needs related to the start-up of your activity or its development , your bank can offer to mobilize your customer account and thus allow you to transfer all or part of your professional customer invoices to it.
The Dailly assignment allows you to benefit from a short-term credit in exchange for the production of invoices representing your trade receivables;
Factoring allows you to dispose of the amount of a receivable before payment is due, but unlike discounting, it guarantees the receivable and includes a collection service.
Whether it is to finance the one-off or recurring needs of your business , the amounts, durations and financial conditions of all these loans are determined beforehand between you and the bank where your professional account for the self-employed is located .
What loan for a business?
These are the medium-term solutions and leasing that can enable you to meet the financial needs for the creation and development of your business.
They often include investments such as purchases of funds, capital goods, etc. But may also be necessary when creating a company such as a SARL , a SASU or an SCI when raising the share capital .
If some of them can be self-financed, thanks in particular to grants or crowdfunding, it may be appropriate to use a business loan.
Medium-to-long-term repayable financing at a fixed or revisable rate with, generally, a constant maturity during the term of the loan. It can for example be a micro-enterprise loan if you have found a bank that agrees to lend money to auto-entrepreneurs ;
Leasing for new equipment, negotiated with the supplier . The bank acquires the equipment that it rents to your company, EIRL or EURL for example, over a period determined in advance within the framework of a contract. Each month, you pay rent recognized as an operating expense. At the end of the rental period, you can buy back the equipment for a residual value agreed upon when establishing the contract
Rental with purchase option (LOA) and long-term rental (LLD) can also be granted for the acquisition of equipment. This is a type of financing very often used by associations , in particular.
The average interest rate on scheduled cash loans was virtually stable (1.48% after 1.46%) after the increase in the previous quarter, and returned to its level of the first quarter of 2021 (see Corporate loan rate 2021Q4).
To obtain a business loan , you must prepare a file which will contain the following documents:
the kbis of your company (impossible to obtain a loan or to open a pro account without a kbis );
It is depending on the type of credit requested, the age of your business and the financing goals that your bank advisor will or will not require other documents.
But upstream of your business loan application, you must above all prepare the elements to convince your banker.
Correctly define your financing needs
Open a pro account online , precisely identify your needs, your different sources of additional and alternative financing to bank credit (personal resources, investors, loan of honor, crowdfunding, aid, etc.) and study the different types of bank credit upstream . for businesses .
Present the company, the product or service and a financing plan
A business plan will centralize all the information necessary for the lending institution since it will present your product or service, your team, and your projects, as well as the financial aspects in detail.
Have or constitute a sufficient contribution
A substantial contribution shows the confidence you have in your project and reduces the risk for the lending bank. Depending on the loans, your situation and the organizations, the expected contribution may range from 30% to 50% of the amount necessary for its realization.
