The search for financing is an integral part of the entrepreneur’s job because, to start a business or develop a project, money is needed. Yet, getting a loan is often an obstacle course for a business owner. Indeed, financing your business can seem complicated when this issue is very far from its original job, to which is added the multiplicity of solutions that sometimes confusing. Loandikapi presents the different ways to finance its business: crowdlending, banks and grants.
A professional loan is an operation by which an economic actor called a lender gives a professional beneficiary a sum of money, against future payment by the latter of interest and repayment of the sum lent. A professional loan can be contracted by many socio-professional categories and in particular the liberal professions, craftsmen, tradesmen, farmers, VSEs and SMEs, self-entrepreneurs or associations.
Professional credit addresses three broad types of financing needs. It makes it possible to finance the equipment of a company (purchase of equipment, machines, vehicles, etc) but also to acquire and / or to build premises, offices, grounds, warehouses, … Finally, a professional credit can serve to a specific need for cash.
The crowdlending, instructions for use
Crowdlending, or crowdfunding loan, is a form of crowdfunding. It is a crowdfunding activity that relies on bringing together project leaders in general (most often entrepreneurs) who are in need of cash with investors, individuals or professionals. Investors finance the company in exchange for bonds. This method of financing, which used to belong only to banking organizations, has now become democratized and individuals and institutions can lend directly to companies for the sake of interest and thus participate in the real economy.
With the expansion of this system, a framework has been set up and there is now a label “Platform for crowdfunding regulated by the French authorities” was created. We strongly recommend that you get in touch with the registered websites, which is a sign of seriousness for yourself as well as for individuals who will be more confident and will lend you the money your business needs. You can find all our tips on crowdfunding and regulations in our article Comparative crowdfunding crowdfunding.
The advantages and disadvantages of crowdlending
The major advantage of using a crowdfunding platform is the ability to “test” your project on the market. In addition, you can finance a project that is only at the idea stage, without necessarily having a finalized product. Finally, it’s a way to communicate about your project while finding funding. The “investors”, who will certainly be your first customers, will also be your biggest RP because they will not hesitate to talk about your company to ensure success (and incidentally recover their stake with interest).
While it has many benefits, keep in mind that this type of funding is slow to implement and requires ongoing communication to achieve its funding goal. In addition, the sums collected are often less than 100 000 € and more generally of the order of 20 000 €, a bit just to start a project.
In addition, the limitation in time can prevent you from achieving your objectives, which is detrimental to two titles: you will not get your funding and it will make you less credible thereafter.
The professional loan via a bank
Professional credit works the same way as a credit for individuals. There are no fixed and immutable standards of personal contribution in a business creation, takeover or financing project. If a contribution is generally expected, it varies from one bank to another and from one project to another, but you will most often have to provide 20% to 50% of the financing needs of your project.
Prepare your file carefully
Your file must include a number of supporting documents: national identity card of the company manager, Kbis extract from the company, the last three balance sheets or a forecast (if it is a company undergoing training or a young company), proof of domiciliation and bank statements of the entrepreneur. Be careful, however, each financial institution may require the provision of additional documents such as guarantees, sureties or the statutes of the company.
You will give your complete file during the interview with the lending institution to which you will apply for your professional credit. Your attitude, the clarity of the presentation of your project, your motivations, the relevance of the explanations of your needs and resources is decisive to obtain the loan. Do not hesitate to train. Also be sure to provide a document detailing the project to be funded, the business activity, the goals to be achieved and the investments needed.
Play the competition
To subscribe to your professional credit with a bank, call in the first place your personal bank but do not stop at this single financial institution and run the competition.
You can also use a credit broker who has the skills and experience to negotiate with banks and offer financing solutions tailored to your project.
Subsidies to finance his business
Grants are another way to finance your business. You can call on the state, Europe or specialized bodies. Beware, however, these subsidies are usually aimed at specific types of businesses.
Indeed, the state can also help you obtain funds for many circuits. NFI, created at the end of 2012, is a sort of public finance supermarket in which everything is found: grants, loans, bank guarantees, capital, etc. But think about the research tax credit that subsidizes companies that meet specific criteria for research and development. development or credit innovation that allows already established companies to recover some of their innovation-related investments. This credit is reserved for companies with fewer than 250 employees and a turnover of less than 50M euros. Finally, the ACRE (help to the unemployed person creating or taking over a business) allows a partial exemption from social security contributions for one year and support during the first years of activity.
Although grant application files take a very long time to complete and even if these grants are difficult to obtain due to high demand and numerous criteria to be fulfilled, they are an ideal financing method since no financial compensation is required. are requested and therefore can significantly limit your risk taking.
The information here and its publications are given for educational purposes. In no case do they constitute investment recommendations. The reader should study the risks before making any transaction. He is solely responsible for his investment decisions.