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Deciding to ask for a loan is the first step for your company to achieve momentum and growth. But many entrepreneurs or owners of SMEs fail to obtain it because they do not meet all the requirements to apply for a business loan.
70% of the entrepreneurs who participated in our SME Credit Report, mention that access to financing is very limited. However, part of this percentage does not meet all the requirements that most financial institutions request to evaluate if it is feasible to grant a loan.
That is why you need to be aware of what is required by financial institutions and know how to achieve each of the requirements to apply for the loan that will help your company to continue its course.
Most financial institutions have certain very basic requirements, which you will realize that maybe you already have them.
One of them is that they will ask you for essential information about your company and you, in order to corroborate that you have the power to make legal decisions about the business. This indicates that you must provide both your official identification and the incorporation of your company and proof of address for both. Well, the more information there is about the legality of your business, the more likely it is that your application will be relevant.
Similarly, you must provide financial data such as income and expenses generated by your SME, because through these calculate the ability to pay you have. In order to determine how much is the maximum that can offer and that both this offer is viable for you and for those who are lending.
A consultation is also made to your credit bureau, since it is to be able to define the risk that exists when lending you money. Through this one you can observe the behavior with credits that you have obtained previously and the level of debt that you have generated up to this moment.
As you can tell, they are not so difficult to obtain. Although if you resort to some other institutions, such as traditional banking, there may be other additional requirements such as a guarantee.
Usually they tend to ask for a guarantee, be it a person who agrees to support your debt or a property that has enough value. Well, it’s like having a guarantee so that in the end the institutions can secure their capital. This establishes greater responsibility for those who apply for the loan and, above all, it may be one of the requirements that limit access to financing.
Fulfilling the requirements to apply for a business loan is nothing special, and much less difficult, since it is very likely that you already have that information in hand, you must simply identify where to collect it.
The identification they request to verify your identity can be your IFE or INE. While for proof of address may be some receipt of basic services you use, such as electricity, water, etc. The constitutive act of the business is obtained at the moment in which you register it in a legal way before a notary, your business activity, it is really the fact that your business is formalized.
These are delivered in a detailed manner, with all those expenses and income that although they seem minimal, are important to demonstrate the financial performance of your SME. You can go to your accountant so he can provide you with this information or do it yourself.
You must have a favorable credit bureau to increase the chances of your credit being approved. For institutions, you just have to sign the permit to have it reviewed. But if you do not have a credit history yet, it’s time to start creating it, you can start with a credit card or direct certain payments to your bank account.
Now that you know what are the requirements to apply for a business loan and that the processes are very different in each institution. It is recommended that you research and compare all the offers that exist in the market. As an additional tip, in Konfío we only request official identification, constitutive minutes and the invoicing of your business, with only those three data we can make you an offer immediately.