Credit, especially business credit, is one of the engines of the economy. Regardless of the size of the company, to make its investments, strengthen working capital or simply strengthen the liquidity of its business or refinance, loans are always an option to consider.
(Recommendations for avoiding scams when receiving job offers).
Right now, the portfolio for businesses is growing at the fastest pace since the start of the covid-19 pandemic. According to information from the Financial Superintendency of Colombia, the commercial portfolio had a nominal growth of 11% in May, an increase not seen since April 2020, and the microcredit portfolio had a growth of 14%, an exceptional figure. if we take into account that before January of this year this portfolio did not have double-digit growth.
Interestingly so far entrepreneurs showed good behavior in paying their obligations, which is highlighted in the portfolio quality indicators by maturity below pre-pandemic levels. This good panorama of business credit, however, has an orange flag, interest rates, which, being generally short-term and variable, are the ones that have been most affected by the increase in the intervention rate of the Banca della Repubblica.
(Superservices warns of ‘sabotage’ for not paying for public services).
Nidia García, director of Financial Education and Customer Experience at Asobancaria, advises, before taking out a loan, to be clear about the destination of the resources requested, the amount requested and the deadline for acquiring it. These actions are essential because paying a credit involves an additional burden on the liquidity of your company, so all its conditions must be in accordance with the needs and possibilities of your business. Keep in mind that if your business hasn’t previously applied for credit, doing so for the first time will help build a credit history, which will help you access new credit in the future.
If you are already sure of the need to take credit, the next thing is to identify which banking entities offer the product or service your company requires, the interest rates and the requirements and documents required by the selected entity.
Remember that before taking credit, You should always compare the conditions between the different options, so you can be sure to choose the best one for your business.
For micro and small businesses without credit experience and for new businesses, the ideal entry point can be microcredit, a financing method that is characterized by lending a maximum of 125 minimum wages to promote productive projects of SMEs.
The commercial portfolio mode provides specialized lines to meet the different needs of your company. Revolving credits are designed to cover immediate contingencies; treasury loans cover very short-term needs; and free investment credits are designed for short-term liquidity financial needs. There is also the ordinary portfolio, designed to meet medium and long-term financial needs for capitalization, investments in machinery or infrastructure. Likewise, entrepreneurs can consider the option of medium or long-term mortgage loans for the acquisition of real estate.
In addition to commercial loans and microcredits, there are other options you can use with your entity like factoring, a credit line so that the supplier can discount the invoice; leasing, financial contract, with which a bank delivers an asset to the company for its use in exchange for a periodic rent, said asset can be transferred to the company by means of a purchase option, upon expiry of the agreed term. Don’t forget that bank overdrafts and corporate credit cards are also a business financing option.
Depending on the sector of your company you will also find financing options such as agro-industrial and agricultural loans, loans to exporters, which are in foreign currency, or green credit lines, aimed at financing projects that promote the sustainable use of resources, renewable natural resources, environmental protection and the competitiveness of the country’s productive sectors.
Finally, keep in mind that in general, to grant a loan, banks mainly consider the payment capacity. This is calculated through the company’s cash flow. In the case of a micro enterprise that has never had access to a loan, this is the most important requirement and sometimes it must be complemented with collateral when there may be some uncertainty about the cash flow. For others, the company’s trajectory, its credit history, the endorsement or guarantee it will present are important elements for its assessment.
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