There are many reasons to lend money to the company. In many cases, a bank loan is necessary to start the business at all. You then take out a start-up loan from your bank or lender, and use the money for inventory, inventory and other things needed to get the business started. In other cases, it is necessary during periods when the income does not cover the costs, or if you need to invest in an already ongoing business. For example, you may need new office supplies, computers or something else.
Ongoing credit that companies have available to offset periods
This can be, for example, seasonal activities where income varies considerably during the year. There it can be practical with a credit that covers the costs during the off-season and which is then repaid during the high season. In summary, the reasons can be many:
- Do you have a start-up company and need money to cover the first expenses before the company makes a profit?
- Has the business been rolling for a while but lack capital to pay invoices and salaries?
- Need more money to grow the business or to offer a new product or service?
Different types of corporate loans
There are slightly different options when you need to lend money to the company. These are the most common.
Lend money to yourself
As an entrepreneur, you can invest in your own business by lending your private money to the company. You can even charge a reasonable interest rate on the amount. The advantage is that you only risk your own money, which can also be a disadvantage if the company cannot repay the debt. However, you avoid high interest costs and can determine the repayment rate yourself.
Corporate loans from bank or lender
This is the most common type of corporate loan. The loan differs from ordinary private loans in that they are adapted to the conditions of the companies. In most cases, in order to be granted a corporate loan, you need an already started business and you must be able to get up some declarations and budgets from the company. There are lenders and lenders who grant loans without this, but these are in principle to be regarded as private loans where you yourself go into the personal loan for the loan and the interest rates are also higher.
P2P, which stands for Peer to Peer, is a form of loan where a private investor lends money to companies. This is an interesting form of borrowing that is becoming increasingly popular in Sweden, as the banks and their requirements for the loan are bypassed completely. Instead, you borrow money from an investor where the chances are high to good conditions. It is important to do this through a serious platform that makes sure everything is going right.
As always, you should carefully compare the options before you take out a loan, and this also applies to corporate loans. Start by reading our reviews on lenders offering business loans and clicking on the lenders you think are interesting.