Business loans to start-up companies

Why start-ups get no money from the bank

Possibly you are thinking of starting a business? Or maybe you just started a new business? Borrowing money from the bank to a start-up business, unfortunately, is not simple. On the one hand, the risk is highest at the beginning before the business has started, and secondly, the amounts are quite small. The bank likes low risk and lending high amounts to large companies. It is simply not worth the time of the bank to spend time on start-ups.

What counts as a start-up company?

A newly started company means a company that has not yet started a company or has not submitted its first financial statements to the Swedish Companies Registration Office. Some banks even require three financial statements in order for the business not to be considered as a start-up. We at Qred think this is wrong, as the first three years of a company are the most difficult. Then you may need temporary injections of capital to grow.

Start your own loan - A business loan to start your own

Before applying for a business loan, you should have done your homework. What should your business do, how much money do you need to get started? How much can you pay back per month? You should think this through carefully so that you apply for the right amount and can clearly explain how the loan will be repaid.

What type of loan is best for startups?

• Traditional bank loan is best suited when the company has come a little further and there is an established cash flow.
• Business loans from ALMI .
• Corporate loans from Qred suitable if you have a temporary liquidity need. Qred is one of the few players making loans to start-ups.
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Loans to newly started joint-stock companies

In our Qred Score We, like many other banks and lenders, rate limited liability companies as something positive. You have entered with a share capital and there are usually several people in the company. You can also add someone who goes on personal bail with you applying for the loan. It is called a guarantor and our requirements for a personal guarantor are:

• That the person must be a Swedish citizen
• Have an orderly economy
• No Debt Balance

Notas de pagamento se não pode nos de ejecutar um loándo, pero pode ser un obstrumento. You may be offered a lower amount at a slightly higher price before you have made any payments.

Loans to newly started individual companies

As a start-up individual trader (EF), it can be difficult to find the right type of financing. Banks have traditionally found it difficult to offer lower loans to individual firms. It simply hasn't been profitable enough. We at Qred think this is wrong and therefore want to help the smallest and startups with financing. We do this through smaller loans and that in this way we get to know each other and can increase the loan in the long term.

This way you will avoid personal expenses and complicated bookkeeping.

Loans to newly started trading companies

As with all other loans Qred gives out, it is beneficial if you can get one or two more people who can go on personal bail for the loan. That is, you get personal payment responsibility for the loan. If you and the other person have arranged finances, it usually makes it easier in terms of both the loan amount and the fee for the loan.

Loans to newly started limited partnerships

That said, Qred can help all types of companies with financing. We take a very positive view of the fact that there are two parts that share responsibility between a limited partnership owner and a complementary partner.

Credit Rating for Startups

When applying for credit to a start-up company, a credit report is often made at the company. It is very rare for the credit rating to be particularly high, as the credit reporting agencies have no history to base the assessment on. As a business, you deserve a high credit rating by consistently making stable and predictable turnover and profits as well as avoiding all types of payment notices.

We at Qred have our own Qred score, which takes into account the business idea and the people behind the company. Call our caseworkers for a professional assessment and get a quick credit report.

Virtually every day someone calls in to Qred and asks if they can borrow to fund their start-up business. Then we try to find out where in the development of the business is and what the needs are. Business loans are an important part of financing but there are often several sources of financing that you should consider to cobble together a solution for your business that can help you meet both short-term and long-term needs.

There are a few obvious questions you need to ask yourself before you start raising finance for your startup, namely:

• How much funding does the company need?
• When can the company start paying back to those who invested in or lent to the company?
• Do you need to borrow money to get the business started?
• If so, how much?
• What payback period is realistic?
• Can you postpone investments so that you make certain investments later - after you have had the opportunity to build up a good history or generate enough profit to cover in any case part of the costs yourself?

Once you have an idea of your needs, there are a few options you should consider to get the capital you need to get started:

1. Your own funds

Many entrepreneurs do not want to mix personal finances with the finances of the company. It is a good idea, but in the beginning it is you who will have the best insight into the business idea and its potential and thus it is you who is the best to assess the risk. Therefore, you should always be prepared to invest some of your own money to get started. It's also a strong signal to banks and other lenders that you believe in your business idea. Don't forget that 99% of companies are financed with their own funds!

2. Sources tradicional

The traditional Swedish big banks rarely lend money to small businesses, and especially not to start-ups; unless the owners already have a long track record and a strong private relationship with the bank. They often require security in the form of, for example, real estate or personal bail. Very common with bank loans.

3. Factoring

Another option is to sell their invoices, which is often used nowadays as an alternative or supplement to traditional corporate loans. Factoring works well for small amounts and shorter periods of time and is usually quick and easy, but usually more expensive than business loans.

4th. Alternative business loans through digital channels

O opción más rápido es es una servicio digital que expandió en la poca de la crisícia financiera, quando bancos grandes stoppas de lâncias para todas as empresas. These digital operators usually have lower costs than the big banks and have simplified the application process so that it can be carried out in minutes online.

What does it take to get a loan application approved? Typîpîk ji van lenderên alternatîf e ku ew dixwazin bibînin, ku ew dixwazin rewşek darayî ya xweş, fêr bibin, ku meriv çawa pêdivî ye ku ew pêdivî ye ku ew ê karsaz bike. A good credit rating (no debt balance, no payment notes and stable income) increases your chances of getting a loan.

3 Ways to Finance Your Startup

Starting your own business is easy, but starting a profitable business without capital can be all the more difficult. After all, marketing, machinery, premises and employees cost a lot of money, but at the same time are crucial for the future of the company.

In order for your startup to grow, you will need to get capital into the business. Fortunately, there is a variety of financing options to explore if you don't have the means to invest your own money.

Below we give you tips on 3 Ways to Finance Your Startup as well as their pros and cons.

1. Business Loans

Business loans are the most common form of corporate finance today. With a business loan, companies can borrow lump sums that they can then use for optional investments, such as machinery, premises or employee salaries, to grow the business.

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Generally speaking, there are two different types of business loans:

• With certainty.
  ‍This form of loan requires a “pledge” in the form of, for example, a corporate mortgage or property.

• Sans seguridad.
  ‍Här, the pledge is not always a requirement, but the main thing is that the company and its representatives have a good ability to pay.

Business loans are really just another word for corporate credit.

Pros and cons of business loans

• Advantaggi:
  With a business loan, you can quickly get capital into the business and repay at a rate that suits you. In addition, you can apply for business loans without UC to avoid burdens on your and/or the company's credit rating.
  ‍
• Disadvantages:
  Not all lenders offer loans to new businesses. This is because many startups have not yet reached a stable turnover. Does the company have a shaky economy and low income increases the risk to the lender, which can lead to a high-interest option rejection of the application. Qred is trying to find solutions to help even start-ups.
  

2. Venture Capital

Venture capital is a popular form of investment that involves individuals or companies investing money in start-up businesses. In exchange for you receiving capital, they receive a share of the company, which means that they will take part of future profits.

Just as the name suggests, this is a form of investment that is associated with high risk. Therefore, it is mainly suitable for start-up companies with great growth potential in the near future.

There are many platforms where companies in search of venture capital can find suitable investors, such as Connect Sweden and ALMI Invest. You can even find investors in your own personal network or enlist the help of an incubator.

Pros and cons of venture capital

• Advantaggi:
  You get a large amount of money into the company that you can use to drive the business forward. If you find an investor with good knowledge in entrepreneurship, you can also get a good partner who wants the company to develop in the right direction.
  ‍
• Disadvantages:
  You are giving away part of your business, which means you can no longer make decisions for yourself. Read up on venture capital if you are interested in this financing option.
  

3. Crowdfunding

Crowdfunding -- ou. The concept originated in the United States, but in recent years has become a global phenomenon.

According to P2PMarketdata.com, Sverige ranks 20th in the list of top countries in crowdfunding with an annual growth rate of 36.58 percent.

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Als, when it comes to crowdfunding, you have many different platforms to explore, but two of the most popular are Kickstarter and FundedByMe.

Pros and Cons of Crowdfunding

• Advantaggi:
  If your startup is developing products or services in innovation, crowdfunding can be a good option to raise capital. It can also be a good way to market your business to the right audience.
  ‍
• Disadvantages:
  Many platforms may charge a commission on the grants the project collected. Crowdfunding is not suitable for all companies, but mainly those who are engaged in the development of new inventions.

Questions and Answers about Business Loans to Startups

1. How does Qred assess the risk of lending money to start-ups without taking a UC on the private person application?

Qred assesses the risk of lending money to start-ups by using Creditsafe for credit reports instead of UC on the private person. Par focussing on the future and plans of the company, they can offer financing without the cumbersome requirements of historical data.

2. What strategies does Qred offer to facilitate financing for start-ups, especially when it comes to avoiding cumbersome business plans and historical balance and earnings reports?

Qred offers a simple application process that takes only 1 minute, with notification within 1 hour and payment on the same day. In addition, their loans have no start-up fee, commitment period or hidden costs, making it easier for start-ups to access financing.

3. ¿Qué tipos de collaterales do bancos tradicional necessários para extendiar lânciones para start-ups, y como este diferente de l'approxão do QRED?

Tîpîrên mezin ên kevneşopî yên mezin hewce ne wek mîna rastîn an otêrên din ên collateralê ji bo dirêjkirinê, ku ji nêzîkê QRED ve li ser potenîstîk û krîditworthiness ya pargîdaniyê ne.

4th. How does Qred assess the creditworthiness and business idea of potential start-ups when offering financing, and what factors are weighed in beyond traditional credit ratings?

Qred assesses the creditworthiness of potential start-ups through a holistic assessment that includes the business idea and the people behind the company, in addition to traditional credit ratings. This allows them to offer financing even to companies with less stable financial histories.

5. What are the main pros and cons of alternative financing options such as factoring, venture capital and crowdfunding compared to traditional bank loans for start-ups?

The main advantages and disadvantages of alternative financing options such as factoring, venture capital and crowdfunding compared to traditional bank loans for start-ups lie in the simplicity of the application process, flexibility of terms and the possibility of faster disbursement, but at the same time can be associated with higher costs and require part of the ownership of the company.

6. Can you borrow money to start your own business?

No, you need a registered company to be able to apply and get a loan.

Good luck with the company!