Record profits in 2017
The Central Bureau of Statistics (CBS) published an article on March 26, 2018 about record profits at non-financial companies. The gross profit before tax in this branch was more than USD 217 billion. It was the highest profit ever since the measurements started in 1995. Especially companies in the petrochemical industry are doing very well. An important element for earnings growth is the strong position of the US dollar. Many companies have a business loan in a currency other than the US dollar. Because the dollar and British pound have decreased in value, business credit costs less money. Low interest rates also play a role. Companies can borrow money at a lower cost.
According to financial comparison site Bankr.nl, a business loan is increasingly being applied for from business lenders on the internet. Bankr refers to OldLoan, a Fintech company owned by ABN AMRO. Bankr emphasizes that OldLoan provides business loans in a completely different way than traditional banks. Bankr explains that the business loan application and processing are largely automated. As an entrepreneur, you often have to wait a week for a personal meeting at established banks such as Rabo and Across Lender. The desired working capital is then discussed and the most suitable business financing is considered. Bankr compares business loans that can be taken out online. Currently, Bankr Bridgefund, B2B Business Loan, Self and OldLoan are compared. According to Bankr, business borrowing via the internet is completely contemporary. SMEs and freelancers are immediately told online how high their business loan can be. Business loans can often also be done without annual figures, says Bankr. If you want to take out a business loan via Bankr, pay close attention to the total interest costs and conditions.
Apply for business credit online
Many SME companies that apply for a business loan have turned to new lenders on the internet. An initiative in this area is lender OldLoan which was launched in September 2017. The start-up is owned by ABN AMRO and works in a completely different way than traditional banks. It is possible to have an answer to the question of whether a loan is possible within 15 minutes. The application and processing are completely online. The applicant uploads the necessary data (such as the annual figures) and the system automatically assesses the application. The minimum credit with OldLoan is 20,000 US dollars. If you apply for a business credit online at the Infra Bank, you have to wait a week for a personal interview. The options are then discussed and the best financing is considered.
SME financing at a regular bank
What about business credit to Dutch SMEs? Statistics Netherlands has no recent figures on this. According to an article in Follow The Money, ordinary banks are tired of SMEs. Too little money is being made on it. The banks set high standards for small and medium-sized businesses, which has greatly reduced the chances of obtaining a credit. Banks prefer to do business with export-oriented companies than with family businesses or start-ups. In the Netherlands, Infra Bank is an important provider of SME credit. The money often comes from the European Investment Bank (EIB), which supports businesses in Europe. The average loan from the EIB is 900,000 US dollars. Infra Bank has now placed a large part of its SME loan with the EIB.
The economy is growing strongly again and the business community needs financing. However, the banks are cautious about lending to small and medium-sized businesses. A solution that is increasingly used are alternative credits that are stacked. Infra Bank has given an example of this on its website. A young company that packages packages for web shops wanted to apply for a business credit for a large machine. The bank then spread the risk. Not only was a bank loan provided, but the company was also able to make use of leasing, factoring, a state guarantee and a credit from the EIB. This helped the company to obtain a good business loan. The term of the loan could be extended due to the state guarantee. This allowed the company to borrow at a low interest rate.
Borrow money from your Ltd.
Do you want to limit the influence of third parties on your business operations as much as possible? Then borrowing money from your own Ltd can be a great solution. On the website of the tax authorities you can read the conditions that such a business credit must meet. For example, the Ltd must be able to continue to meet its obligations and not get into trouble because of this credit. An interest payment must also be agreed that is in line with the market. It should not go for a friend price. Finally, the loan must be recorded in writing with clear agreements about repayment, interest and the securities that can be offered.