Need a springboard to launch your business? Find out about the business loan that will make it easier for you to get started. Small Business Trade Credit is one of the best financing options for your business, as it provides a number of significant benefits.
The most common financing solutions used by SMEs
As the owner of your business, it is only natural that you are looking for the best financing solutions. SME credit is, as such, one of the most practical corporate financing options. Get a business loan for your SME and enjoy all the advantages that come with it. Credit for SMEs is a more flexible possibility and offers higher amounts than conventional loans.
Managers of SMEs looking for a financing solution often resort to traditional solutions offered by banks. By opting for business credit, you can choose the amount requested as well as the duration of the loan. You have :
- The operating credit. These are solutions that work directly in relation to the current account of the said company. Note, however, that a line of credit also means fairly high interest rates in general. However, everything will depend on market conditions.
- A second option is to opt for medium or long term financing. These are most often loans or leases, especially if the object of the request is the purchase of a vehicle. This time, the interest rates are more advantageous overall.
Choose SME credit as a more effective solution
Business credit is a specialized and innovative solution that allows SMEs to obtain financing in line with their needs, without having to go through their bank. A private financing organization can do the trick to obtain advantageous credit. By choosing this alternative, the client has the chance to benefit from credit expertise. Business credit is the equivalent of private credit, which used to be granted only to individuals.
The difference between conventional offers and new business credit solutions for SMEs is that they offer more flexibility, a more attractive cost and a sought-after simplicity. These differences have been carefully studied in order to compete with the solutions generally offered by traditional banks.
Why is business credit a good solution for an SME?
New private credit financing solutions for SMEs offer many particularly advantageous opportunities. Here are these famous advantages of business credit:
1. Business credit is more flexible
When you take out a business loan, rest assured that you will be able to enjoy free use of the money credited. In addition, the choice of the repayment period is up to you and you will have the option of repaying early if necessary. Note that early repayment allows a considerable reduction in interest.
2. Business credit is easy to set up
If you don't like complex procedures and paperwork, you will love business credit! In fact, here the administrative procedures are greatly simplified, which makes life easier for borrowers. Responses from establishments are generally very quick!
3. Business credit is not expensive
In terms of cost, it is in your best interest to take out a business loan! You can indeed borrow from CHF 50,000.- to CHF 5,000,000.- according to your needs. The loan conditions are often advantageous and you will enjoy a fixed term, a fixed rate with fixed monthly payments. Everything is fixed, no excess costs, so no bad surprises!
As a borrower, you can therefore benefit from clear budgeting. Controlling costs is an important element for the good conduct of your business.
How business credit works
Here are the 2 possibilities available to you when applying for business credit:
- Apply for credit from your current bank. The latter will study your file in depth and you will have to wait many weeks before receiving an answer. The loan will generally be in the form of a line of credit (overdraft on the current account) which you can use to finance the purchases agreed with your bank.
- The second solution, much more practical, will be to seek the help of Lica who will take care of the steps for you. As an independent intermediary, we will call upon all of our partners to obtain the best solution on the market for you. You will then obtain SME financing in the form of a credit and you will therefore be free to allocate the funds according to your needs and objectives.
What rate is applied on a trade credit or a business loan?
As a reminder, the amount of the loan or business credit can go up to the sum of 5 million francs. Rates generally start from 2.95 %.
For information, in case you would like buy premises, Lica will offer you a mortgage loan solution which will be more suitable and even more advantageous than SME credit.
What are the reasons for taking out a business loan?
SMEs take out trade credit for x reasons, as long as it goes into the development and improvement of your business. You may need to take out a business loan to improve your company's operating systems, to modify your computer equipment, to renovate your offices and refurnish them or to acquire a professional vehicle. Each of these examples represents a considerable cost and it is always better to finance the necessary sum for a given project, rather than to dip into the reserves of your company.
The conditions necessary to obtain a business loan
You will need to meet certain criteria in order to be eligible for trade credit. The conditions always aim to become more flexible, nevertheless financial organizations always prioritize companies that have already existed for at least a year, in favor of those which have just been created or who want to start their project. Overall though, you'll need a few things:
- a full year review;
- be able to demonstrate that the business is profitable;
- not have any lawsuits pending on behalf of the company;
- a company registered with the commercial register ;
If you think you don't meet these criteria, don't worry! Lica also has alternative solutions which will certainly be of great benefit to you. Do not hesitate to call on our advisers who will be able to help you in your efforts and give you the best advice to obtain your financing as quickly as possible.
And in the event of a lawsuit, is business credit possible?
What if the business in question has a lawsuit? Know that there are many credit registers that banks consult in Switzerland. If you want your financing request to be successful, it is imperative that you are up to date with all your credit data. Lica will also assist you in your data cleaning procedures!
Our conclusion on SME credit
Lica has extensive experience in the field of SME credit and therefore regularly supports customers in achieving their dreams.
As for any type of financing, it will always be advisable to analyze with the greatest care the current situation of a company to then orient itself on the best solution without wasting time. We therefore believe that it is always preferable to invest a little more time at the beginning of the relationship in order to increase the chances of granting credit. That is why, Lica favors in all cases a personalized approach to the question of credit and takes the time to know its customers.
Now that you know how business credit works, all you have to do is apply. With Lica it's simple, fast and efficient! And yes, you make your request online in less than 5 minutes and then our specialized teams will do the work for you. This saves you time and money!
Do you have questions before making your request? Our advisers are there to answer your questions 7 days a week. Ask us for more information and we will be happy to answer you.