According to Ms. Bornais, you can help your cause by finding one or more partners with an impeccable credit record. A more financially strong and qualified team of leaders can tip the scales.
In such a situation, it is important to consult a lawyer to draft an agreement which determines the roles and responsibilities of each one and will establish the rules at the time of the stake in order to protect the stakeholders.
A relative or friend can stand surety to facilitate the granting of a loan. This person must meet the lender's eligibility criteria.
The lender's decision will be based on the guarantor's personal assets and his credit history. The parent or friend must also understand the scope of their commitment since being a co-signer of the loan will appear on their credit report, which could limit their borrowing power. He must also understand the extent of his responsibilities if, unfortunately, you fail to fulfill your obligations.
No start can be made without a personal financial contribution. But you should not wait until you have exhausted your savings before tribal loans guranteed approval knocking on the door of your banker. Once the credit file is affected, the coast is necessarily more difficult to go up.
In particular, it is important to properly structure your business plan from the start. Incorporation allows you to protect yourself and separate your business credit from your personal credit.
"You also have to plan your project in advance," added Ms. Bornais. It is justified to use your line of credit to finance your start-up, but you must have a game plan for the repayment of interest. You also need to have thought of other source of seed funding.This will demonstrate that you have done your homework well and increase your credibility with lenders. ”
Banks are not the only alternative to find financing . Among the other possible options:
Factoring : It allows you to assign your invoices to a financial institution called "factor". Considerable advantage: The factor therefore pays you the bill! He will pay himself to your client. However, the cost is relatively high and the factor suffers from a very bad image in France.
Stock / campaign credit : In the case where your activity is seasonal, there may be significant cash gaps because of the purchase of substantial stocks. However, sales will be made 3 to 4 months later. Campaign credit therefore allows you to finance your working capital requirement. Certain activities such as the building trades, agriculture and tourism generally use campaign credit. The downside is that you have to have an old and uneventful relationship with your banker.
Leasing : Also called leasing, this option is ideal for financing equipment without upsetting the balance sheet. The leased equipment is not included in the balance sheet. Another advantage, leasing rents are tax deductible. However, the cost is higher than that of a bank loan and certain equipment cannot be financed by leasing.
Subsidies : Certain communities such as town halls or Chambers of Commerce and Industry grant subsidies, subject to conditions. Certain criteria and a financing plan must be validated beforehand
To date, bank borrowing remains the main solution for financing businesses.Despite the crisis, banks are still lending.However, it must be noted that theconditions for granting have been considerably tightenedin recent years.Banks are always asking for more guarantees and an extremely well-crafted file.