Can my business get a loan?
2020 November 05
Based on the most frequently asked questions about business loans, we have prepared detailed answers concerning the prevailing business loan myths.
Can new companies get a business loan from a bank?
Yes, newly established companies can get a business loan from a bank.
In all cases, banks try to assess the risk as accurately as possible when lending to newborn businesses. Given that many start-ups go bankrupt before reaching the age of two, it is more difficult for young companies to get loans. Paradoxically, in some cases, the collapse of new businesses is caused by insufficient working capital, which makes it difficult to generate initial profits.
Our mission is to help businesses not only survive but also thrive. Therefore, we consider each case individually. However, there are a couple of factors that often help new businesses get financing:
The founders of the company have relevant experience in the specific sector in which they plan to operate. For example, an entrepreneur who imported paper cups in a self-employed capacity decided to start a company and continue his business.
The company plans to operate on the basis of a successful franchise.
The company has potentially valuable intangible assets: trademarks, contracts with brands, property rights, contracts with customers.
Can companies with negative cash flow qualify for a loan?
This is not a disqualifying factor. Such a financial curve may also be due to a lack of working capital or costs that could be reduced. For example, a company rents premises that are more expensive to rent than loan payments to purchase these premises. By obtaining business credit, such a company could effectively reduce its operating costs.
In what cases can the services of smaller banks be more effective in helping businesses borrow?
Large banks tend to rely on strict bureaucratic processes and are not flexible with their customers. However, business needs are particularly dynamic, requiring quick and case-specific solutions.
Mano.bank seeks to help customers who have not received appropriate service from the major banks, which is quite common. In cases where the company has valuable transferable and intangible assets (trademarks, property rights), when it is desired to borrow for a newly established business, when the company is engaged in non-traditional activities, or even when the company has negative cash flow.
Can banks finance the acquisition of a franchise and the tools needed for its operation?
Yes. Franchising is a well-known and understandable business model. The franchisee can also start a new business if the franchise itself is commercially successful. The buyer should also have accumulated 20-30% of the capital needed to run the franchise.
Read more about franchise financing here.
Can I get a loan while working on a self-employed (IV) basis??
No, business loans are not granted to the self-employed or business license holders. Business loans are only granted to UAB, MB and AB companies. However, if your self-employed business is successful, starting a company and relocating your business activities is really easy and quick.