Start-up loan - Loans to new businesses
Free app
Non-binding application or offer
The money is paid on the same day
Summary
Banks often avoid financing start-ups because of the high initial risk and small amounts of loans that make the activity unprofitable for them. A start-up company is often defined as a company that has not yet filed its first financial statement, and banks may require up to three financial statements before the company is no longer considered a start-up company. Qred offers alternative financing solutions, such as unsecured corporate loans and corporate credit cards, particularly suited to the needs of start-ups and liquidity problems.
Why banks are rejecting start-ups
Are you considering starting a business, or maybe you just started a new business? Unfortunately, lending money to a start-up business from a bank is often not easy. Firstly, the risk is greatest at the beginning, before the business has started, and secondly, the amounts are quite small. The bank likes a little risk and lends large sums to large companies. It is simply not worth the bank to devote time to start-up businesses.
What counts as a start-up business?
A start-up company is a company that has not yet started a business or has submitted its first financial statements to the Finnish Trade Register. Some banks require up to three financial statements to keep the company from being seen as a start-up. We at Qred think this is wrong, as the first three years of the company are the most difficult time of all. Then you may need temporary working capital to grow and maintain the business.
Business loan to start your own business
Before applying for a business loan, you should be familiar with the basics of the business. What is your business going to do, how much money do you need to get started, how much can you pay back in a month? These things should be thought through carefully so that you can apply for the right amount and be able to clearly explain how the loan will be repaid.
What type of loan is best for start-up companies?
- Traditional bank loans are best suited when the company is in an established position and has evidence of cash flow.
- Qred's corporate loan is best suited in a situation where the company has a temporary need for liquidity. Qred is one of the few operators that also offers loans to start-up companies.
Qred Bank's business loan is best suited for a situation where the company has a temporary need for liquidity. Qred is one of the few operators that also offers loans to start-up companies.
Loans for start-up companies
In the Qred Score rating, we assess the creditworthiness of the applicant company. The loan applicant must be entitled to name writing in the company. If you wish, you can also add one or more people to guarantee the loan with you. Requirements for a personal guarantor are as follows:
- The person must be a Finnish citizen.
- He must have personal finances in order
- No charge-offs
In most cases, the delinquency mark prevents the issuance of a loan. You may be offered a smaller amount for a slightly higher price before the payment default entries are cleared.
Loans for new entrepreneurs
As a newly established private trader, it can be difficult to find the right kind of financing. Often it is a slightly smaller business, which may be seasonal or otherwise fickle. Banks have traditionally found it difficult to offer more affordable loans to private traders. It's often not profitable enough for banks. We at Qred think this is wrong and that is why we want to help smaller and start-up companies get funding. We offer loans that are proportional to the size of the business, so as the business grows, loan amounts may also increase.
Another option is to use a corporate credit card offered by Qred, Qred Visa. This will save you from individual expenses and complex accounting. All payments are collected on one invoice and it is perfect for everyday expenses and purchases.
Loans for start-up companies
As with all other loans issued by Qred, it may be advantageous to get one or more other people to guarantee the loan with you. Personal guarantee means that you have a personal liability to pay the loan if the company fails to meet its payment obligations. If you and a potential second guarantor have finances in order, this will positively affect both the issuance of the loan itself and the terms of the possible loan.
Loans to newly formed limited partnerships
As mentioned, Qred can help most forms of companies with financing, and limited partnership or open-ended companies are no exception.
Credit rating for start-up companies
When applying for a loan to a start-up company, a creditworthiness assessment of the company is carried out. It is quite rare for a new company to have a particularly high credit rating, as credit reference agencies do not have a history on which to make an assessment. As a business, you earn a high credit rating by consistently making steady and predictable sales and profits and avoiding all kinds of payment defaults.
We at Qred have our own QRED scoring, which takes into account the company itself, its history and the people behind the company. Call our customer service or submit an application online for a professional appraisal and a quick credit decision.
Qred is phoned almost daily asking if it is possible to apply for a loan to fund a start-up business. The first question is whether the company is registered in the Finnish Trade Register (i.e. whether the company has a valid business ID). Then we will find out at what stage of development the company is and what its needs and liquidity are. Business loans are an important part of the financing package, but there are often many financing options that you should consider in order to put together a solution for your business that allows you to meet both short-term and long-term needs.
