Loans for companies – current financing options to choose from

Compare conditions and pay attention to suitable credit

Most portals on the subject of credit deal almost exclusively with financing for private individuals. The self-employed, freelancers, companies and medium to large companies also frequently require financing, by means of which certain projects can be realized. It is therefore important for these groups to know which financing options are currently available on the financial market.

What do companies need capital for?

What do companies need capital for?

There are a number of occasions when entrepreneurs in the form of self-employed or freelancers and businesses need capital. For example, replacement investments have to be made, new buildings are to be bought or leased, the vehicle fleet is to be expanded or additional employees are to be hired. Companies can not always finance these expenditures with equity, so financing is necessary.

Basically, there are several ways in which companies can raise capital, but among other things, it depends on the size and financial strength of the respective company. Options include the following options when companies need fresh capital:

  • IPO (issue of shares)
  • Issue a bond
  • bank loan
  • Crowdlending (project financing via platform)

Basically, the first two options, ie going public or issuing bonds, are only suitable for relatively large companies, because both are a relatively expensive affair. Bank loans and, above all, crowdfunding and crowdlending are available to almost all companies and can even be used by freelancers and sole proprietors or the self-employed.

Property financing as a frequent financing option

Property financing as a frequent financing option

If we take a look at the purpose for which companies need capital, then the focus is on acquisition or investment, namely the acquisition of objects. These objects are usually used to maintain the business, because of course, a company needs a certain equipment, for example, to produce goods or services to offer. Object financing is particularly useful if one of the following acquisitions or investments is to be made:

  • Extension of vehicle fleet (car or truck)
  • Buy commercial property
  • Purchase of new machines
  • Acquisition or extension of office furniture
  • Purchase of commercial vehicles

In all these cases, so-called object financing is available, which banks offer to their commercial customers. For example, the expansion of the vehicle fleet can be realized through special fleet financing, for example when new trucks or even passenger cars have to be purchased. Another financing alternative, which also falls into the area of ​​property financing, is truck leasing on the one hand and machinery leasing on the other.

In addition, there are other forms of financing in this segment, such as:

  • developers funding
  • Hire purchase machines
  • Company car leasing

Different loan types for businesses

Irrespective of whether you, as the owner of a company, need capital as part of a project financing or other investments need to be financed, banks have different types of loans. In addition, some lenders also offer the option of leasing or factoring, often through partner companies. Often, the following types of loans are available within the scope of a commercial financing, each of which is geared to a specific purpose:

  • corporate credit
  • Working capital loans
  • investment loan
  • Goods financing credit
  • bridging loan
  • Shopping credit
  • overdraft
  • Sale-and-lease-back

The easiest loan for companies is certainly the current account loan, because this is a promised line of credit on the business account. Of course, overdrafts are of course not suitable for financing larger purchases, but rather serve to bridge short-term liquidity shortages. For example, if companies want to expand their vehicle fleet or renovate their office furniture, then the company loan is particularly suitable. This is a kind of installment loan, as it is also known in the private customer sector. Some banks do not offer this loan under the name of corporate credit, but call it, for example, corporate credit or commercial credit.

Relatively often, companies from the trading and manufacturing industries use a working capital loan. This is used to pre-finance the purchase or production of goods, because of course, income will only flow after the goods have been sold. A similar loan in the corporate sector is the bridging loan, as it is also about bridging a certain period of time until revenue can be generated.

Special forms of financing for companies

In addition to these classic commercial loans, there are a number of special financing options that can be of benefit to companies. Mention should be made here, for example, of the credit for business succession, which is always used when a part of the company is taken over by a successor or the entire company changes hands. The start-up loan is certainly also one of the special loan options, as it is primarily about the self-employed, freelancers or companies can finance the investments that are necessary in the context of a foundation.

Compare conditions and pay attention to suitable credit

As there are many loans available on the market that fall into the wider commercial loan market, it is all the more important for loan seekers to make a detailed comparison. When comparing the offers should not only on the conditions, in particular the interest rate and the form of the eradication, be respected, but at least as important is that you decide on the appropriate loan type.

For example, the interest differential between, for example, a current account credit and a traditional company loan is often more than five percent. By comparison, it is possible at this point to save some costs. In addition, special corporate loans are geared exactly to the respective purpose and therefore serve as an optimal financing alternative.  

What documents are required for the loan application?

What documents are required for the loan application?

Regardless of whether you, as the owner of a company, wish to complete the financing online or at a bank branch, some documents are always required. In addition to your personal credit rating, the key is that the bank can view the business figures and assess whether the company is likely to be able to repay the loan. The classic documents used to assess the creditworthiness of a company or self-employed include in particular:

  • balance sheet
  • Income statement
  • Business evaluation (for self-employed)
  • Business plan (when setting up a business)
  • List of assets (investment forms)
  • Annual report
  • forecasts

Of course, what documents you need in detail depends on the particular lender and also on the form of the loan. In conclusion, it is important to note that banks provide some financing options to traders, such as the self-employed, the self-employed, and the business, so finding suitable finance is relatively easy.