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Loan for starting entrepreneurs.

For the approval of a business loan it is typical to verify the payment discipline of the entrepreneur and assess the financial health of the company. In the case of start-up entrepreneurs, however, there is no company history, yet many new businessmen need to borrow money to start their business. What are the options for these cases? Under what conditions do novices get a business loan?

Few people have enough of their own funds at the start of their business.

Few people have enough of their own funds at the start of their business.

Yet just the beginnings are usually the most costly stages of business. There are a number of ways to raise money for business. You can use crowfunding, take a peer-to-peer loan (eg Zonky) or try your luck and get an investor. But the most traditional way is to apply for a loan to a banking institution.

Fortunately, banks are aware that start-up entrepreneurs need help. Many of them have therefore created banking products just for the purpose of starting a business. This could be a loan for machines for start-ups, a loan for the acquisition of office equipment or the premises themselves, a loan for the acquisition of a fleet, etc.

In particular, it differs from normal business loans in terms of lower administrative burdens and reduced conditions in the approval process. Yet, each bank has slightly different requirements. It is therefore more than appropriate to find out in advance maximum information.

The most popular loans for start-up entrepreneurs

Every bank does not automatically offer a loan for start-ups. It is primarily the domain of large, stable and strong banking institutions that can afford any higher risk. Which banks provide business loans to start-up entrepreneurs and under what conditions?

  • Good loan Start from Well-known bank

    Profi loan Start from Komer─Źní banka

Well-known bank prepared a loan for start-up entrepreneurs in cooperation with the Best Lending Company. Good Loan Start is intended for sole traders and companies. It is provided and approved on the basis of an assessment of the business plan. If approved, the applicant will receive the money within two weeks.

Thanks to Good Start credit, entrepreneurs can finance virtually anything they need for their start – machines, technology, cars, office equipment, business premises and much more.

The parameters of this loan : up to USD 1,000,000, maturity of 5 years, interest rate 9.9% pa

One of the largest banks on the Czech market has also created a loan product for start-ups in cooperation with the Best Lending Company. 

The tax return is also documented. If the entrepreneur does not have it yet, statements from the company or personal bank account for the last 6 months are submitted. This is also related to the verification of payment discipline, when the bank will be interested not only in possible records in the registers of an already established company, but also in the records of the applicant as a private person.

In addition to the above documents, the Bank will also be interested in the business plan. They have to make sure that everything is well thought out, including the financial balance sheet. You can apply for a Good Loan Start before starting the business or up to three years after the establishment of a trade or company.

The parameters of this loan : up to USD 600,000, maturity of 6 years, interest rate 9% pa

  • Small business loan from Lite Bank

    Small business loan from Lite Bank

Another offer of a loan for start-ups is guaranteed by the Best Lending Company. Lite Bank offers a Small Business Loan, which can have two variants – a secured or unsecured business loan. The parameters of the loan then depend on the choice of a particular option.

The small business loan is intended for selected professional groups (entrepreneurs and legal entities), such as doctors, dentists, veterinarians, pharmacists, notaries, lawyers, tax advisors, auditors, executors, court experts, interpreters and architects.

Parameters of this loan with collateral : up to 10 000 000 crowns, maturity 15 years

Parameters of this loan without collateral : up to USD 1,500,000, maturity of 7 years

  • Non-purpose loan from Goodbank

Starting entrepreneurs have the option to choose a non- purpose loan from Goodbank. However, the condition for this case is that they have to actively do business for 12 months. An entrepreneur with an annual turnover of USD 300,000 to USD 50 million can apply for a loan for investment and operating purposes.

It shall be accompanied by a tax return (or 6 bank statements), a balance sheet and a Goodt and loss account, or a confirmation of tax and social security debts. The collateral is either a lien on the property, but if this is not possible, a blank bill is signed.

Parameters of this loan : up to USD 3,000,000 (with collateral USD 5,000,000), maturity of 15 years, interest rate 8.9% pa

Summary

As can be seen, the conditions of individual lenders for start-ups vary in some respects. If the applicant is not sure what is the best option for him / her and his / her business start, he / she should contact a professional financial advisor. While his services will cost something and will be an extra expense, such a crucial decision as to choosing a suitable credit product undoubtedly requires absolute certainty.