How to get a loan for opening a small or medium business?

Lending to small and medium-sized businesses is a way to support the development of entrepreneurship through loans. Almost all over the world loans for various business purposes are aimed at improving the dynamics of economic development and at the same time remain profitable for the banks themselves.


Quite often, novice businessmen are faced with a key problem – a lack of start-up capital, and a loan is the only way to get essential resources for starting a small and medium-sized business:
• Lease of commercial real estate. The cost may differ depending on the location, area, condition;
• Salaries to staff. The amount of finance is calculated based on the required number of employees, their qualifications;
• Advertising campaign (from banners to promotion in social networks).


What is the loan for?
• Launching a new business project;
• Rent or purchase of additional retail space or vehicles;
• Purchase of additional equipment, repair work;
• Expansion of business or product range.


The size of the loan for small or medium-sized businesses depends on the profitability of the enterprise. In addition, the date of company registration will be taken into account when determining the loan amount. That is, if a company exists for about six months, then you can count on no more than $ 2,000, from six months to 1 year – a maximum of $ 5,000, more than a year – $ 20,000, 3-5 years – $ 30,000.


Without collateral, loans to small businesses are issued only for small amounts, everything depends on the individual characteristics of each bank. Among the priority areas of business, which are issued larger unsecured loans, most often there are IT, manufacturers with goods for export, agriculture, and medical services.


When taking a loan, you need to pay attention to all points of the loan offer (interest rate (10-20% per annum), commission (1-3% of the loan amount), loan term (1-10 years), collateral (real estate, transport, equipment )) and consider the possible risks. It is imperative to soundly assess the company’s solvency and develop a clear financial plan.