Month: January 2020

What are the different types of loans for entrepreneurs?

by admin

There are different types of loans for entrepreneurs. Although some forms of entrepreneurship such as startups use alternative financing techniques. The traditional credit circuit has very interesting products to start a business. Do you know them?

Types of loans for entrepreneurs

Types of loans for entrepreneurs

Public Administrations often have financing programs in place that can be interesting for many entrepreneurs. However, they usually have requirements that condition the activity, so it is interesting to study the calls thoroughly before requesting them.

Outside public credit, private lenders are those that have traditionally nurtured entrepreneurs. The products that they usually offer to entrepreneurs are:

- Credit lines. They work in a similar way to the credit card. A credit to the entrepreneur is precluded to make use of it when needed, charging interest on the money borrowed. This option will allow you not to rely exclusively on cash flow.

- Long or short term loans. Long-term loans are usually more substantial and easy to repay. On the contrary, short-term loans can meet specific liquidity needs, but must be repaid quickly. Its advantage is that you can choose the most appropriate product for your circumstances at all times.

- Mini loans. Microcredits are small loans (usually between 300 and 1000 dollars) that are quickly requested through the Internet. They are popular for their versatility and comfort, although you have to be responsible when requesting them so you don't end up in debt.

What entrepreneurs need to apply for a loan?

What entrepreneurs need to apply for a loan

As an entrepreneur, you will not have a problem when accessing small credits. However, it is likely that if you ask for large amounts of money you will be asked:

- Guarantees. It can be personal or bank guarantees. They can also consist of mortgages, which can be established on real estate or intellectual property rights.

- A feasibility study. In most cases the doors to credit are opened if the viability of a project can be documented.

If none of these elements are available, there will still be lenders willing to grant a loan. However, it is easy for conditions to tighten (for example, raising interest rates).

How loans benefit entrepreneurs?

How loans benefit entrepreneurs

Access to credit is very important for the entrepreneur. It allows to acquire the first elements of the company (local, machinery, software use licenses...).

In addition, throughout the life of the project a loan can help to:

- Balance cash flows.
- Anticipate liquidity to pay payroll.
- Deal with penalties and unforeseen expenses.
- Invest in business improvements.

In short, it is interesting to know the different options of loans for entrepreneurs that are in the market. Few business models can take off if they do not have access to financing. In Ideal Loans, entrepreneurs can find and compare different financing alternatives.

What does it mean to pledge a loan and what does it consist of?

by admin

Pledging a loan means guaranteeing the return of the money that has been slow to us, leaving a good as a pledge.

Normally, when you apply for a loan, you offer your personal guarantee to respond for your return, that is, you respond with all your assets, present or future. In some cases, the bank or the lender may request an additional guarantee to grant you the money: the pledge of a good. It is about leaving in the hands of the creditor, as a guarantee that you will fulfill your obligation, one or more physical or financial assets: a vehicle, a bank deposit, shares, whose value equals the loan granted. You can do it, as the holder of the loan, or a third party, who instead of acting as guarantor, pledges a property of his property, thus limiting his risk.

 

Pledge a loan or apply for a home equity loan?

Pledge a loan or apply for a home equity loan?

Pledge a loan instead of resorting to a home equity loan (where the payment is guaranteed for the value of the property) is cheaper to contract, since you do not have to pay taxes such as Documented Legal Acts or expenses such as appraisal, management and registration in the Registry. In a loan with pledge you would only have to go to the notary to document the operation in a public deed.

Also, by presenting a pledged asset as an additional guarantee of payment, you may have access to more capital or a more competitive interest rate.

 

Differences with the mortgage

mortgage loan

Unlike a mortgage, in which you can continue to use the mortgaged real estate while you are paying it, when you pledge a loan, the pledged property passes to the creditor, and you cannot use it during the life of the loan. Of course, if it is a financial asset, such as shares or an investment fund, it can continue to generate profitability.

 

What happens if you take out a loan and stop paying it?

take a loan

In case you stop paying the pledged loan installments, the bank can execute your right to keep the pledged asset and recover your money. If it is a physical asset, I would take it out for public auction, while if it is a financial asset, you can run it to recover the borrowed capital (for example, if they are shares, you will sell them, and if they are shares of a fund, you will liquidate them).

Find out here about the characteristics and requirements!

Installment loan for civil servants

by admin

Banks grant loans to different customer groups, including officials. This group of people enjoys a special status with banks because they offer many advantages. So it is usually not difficult to get a loan for civil servants. Officials can choose the bank themselves where they want to apply and can save a lot of money. In order to apply for an installment loan for civil servants, no other loans are allowed to run. If this is the case, the old loan must first be repaid, such as with the new loan.

Why is it so easy for civil servants to lend?

Why is it so easy for civil servants to lend?

Officials have a very safe job and are only exceptionally affected by unemployment. So they have a secure income, which is usually quite high. These advantages are often sufficient to apply for an installment loan for civil servants from a bank. Banks always want to be sure that they will get the borrowed money back: Since the income is secured, this security is given and banks welcome the group of officials as customers. This means that borrowers with official status can choose the bank themselves and are spoiled for choice.

What is special about a loan for civil servants?

What is special about a loan for civil servants?

An installment loan for civil servants cannot be compared to other loans that a normal worker receives, for example. The loan amount can be much higher because there is collateral that an employee cannot offer. It is not uncommon for the loan amount to be 100,000 USD. The installment payments are very low because the term can be up to 20 years.

In this way, a civil servant can easily have a house financed without having to make huge monthly losses. In addition, the official receives life insurance from an installment loan for civil servants. The insurance bills must be paid by the borrower, not the installments of the loan. The loan installments are repaid with the insurance contributions.

Comparisons are also worthwhile for civil servants

Comparisons are also worthwhile for civil servants

Since civil servants are very popular with banks, there are numerous offers for an installment loan for civil servants. Everyone wants to win the customer over so there are attractive offers. For example, an official should compare offers with a loan. In this way, interest can often be saved and good conditions agreed. An application should only be made once a comparison has filtered out the best offer. There won't be any disadvantages, but interest rates can vary widely. Those who are not careful may pay too much.