For example, many entrepreneurs only look at the lowest interest rates. Of course, that's also important, but it's not the only thing you should look at. In this blog, we'll discuss what to consider when you decide to borrow business money. This way, you will enter the process well prepared and have the best chance of a successful application.

Who wants to lend a company business money these days?

Business lending is becoming increasingly difficult for the average entrepreneur. This trend was already visible before the coronavirus pandemic; in fact, it has been much more difficult to get a loan from the bank since 2008. Unfortunately, things have not gotten better because of the corona crisis...

Did you know that as many as three quarters of all applications to the bank are rejected? In many cases, banks refuse to provide loans to entrepreneurs any longer. This has to do with the fact that they find the risk too high and/or are unable to assess it properly. But it is precisely the SME entrepreneurs who are now shy about this support.

There are many other options for funding your business. Like through crowdfunding or through investors. More and more entrepreneurs are also discovering direct lending as a good alternative. It is a fast way of financing without bank intervention. That is the business lending of today — and the future.

Preparations for business lending

First, see what options are available for your loan purpose. To determine which option best suits your situation, ask yourself the following 4 questions:

How much money do I need?
The amount required determines where you can borrow. Most direct lenders can help you with amounts of up to approximately €1,000,000. Do you need more? Then you will have to look at investors or you can still try your hand at the bank.

How fast do I need the money?
If you need money next week, you'd better skip the bank anyway. The review process takes a long time and can easily take months. For example, each financing option has its own lead times. A direct lender is known for switching quickly. Payment can usually be made a few days after applying for funding.

How am I going to refund the money?
The method of repayment also determines your choice. Direct debit is by no means always interesting, for example for companies with varying (daily) turnover. Does the funder offer the option to pay off by pinskimming? Then, in such a case, it is much better suited to your situation.

In how long can and do I want to pay back the money?
This depends on what you want to finance. Are you buying inventory or want to invest in business premises? One involves a much higher amount than the other. Of course, if you had to pay both back in 12 months, that should just be possible. Take a good look at what you can actually wear.

Based on this information, you can make the decision for the most appropriate form of financing. An additional advantage is that you also have the answers ready for the application process right away!

Prepare the right documents

Now that you know where to go for a business loan, it's important to know how you can submit the application successfully. The more complete you provide all the information, the faster the process runs and the better the risk assessment can be made. It is now time to prepare the right documents.

Each funder has their own criteria. For example, the bank has a greater need for information than a direct lender. Think of documentation such as a profit and loss account and balance sheet for the past 2 years, income tax file/assessment for the past year, a forecast for the current and next year, a business plan, etc. With a direct lender, information such as your turnover over the past year and an overview of your business transactions is sufficient. Take a good look at what you need for the form of financing of your choice and work everything out as clearly as possible. Now you're ready to apply for a business loan and boost your business.

A business loan with Swishfund

Swishfund helps entrepreneurs achieve growth, take advantage of market opportunities and stabilize the company. As an entrepreneur, you can apply for a business loan if your company has been registered with the Chamber of Commerce for at least 12 months and you have an annual turnover of at least €50,000. Applying for a business loan is completely free. Applying is an online process. You can find out what this application process looks like on the 'how does it work' page.

Do you want to start your free application? Click here! Within 10 minutes, you applied for a business loan and your application was reviewed within 24 hours.