What credit for a small entrepreneur?

Small and start-up entrepreneurs find it difficult to get cash to start up. However, there are banks, e.g. mYBank, which, without any collateral, only on the basis of an entry in the economic register, is ready to borrow 10,000 to start. zł. At OutBank, an entrepreneur can count on a debit balance in his account from the first day of starting operations.

Generally, however, when applying for a revolving loan, you must prove a good banking history. Such credit is inextricably linked to the business account maintained by the bank. However, this does not mean that we cannot transfer the loan to another bank.

The competition has meant that banks are ready to take over revolving loans from other banks, even increasing their limit if the entrepreneur decides to transfer the account.

Revolving loan

Revolving loan

Every company needs funding from time to time. A revolving loan or an overdraft balance becomes necessary. Based on the entrepreneur’s banking history, the bank is able to assess the risk of granting a loan.

The entrepreneur, in turn, estimates that it pays him to take advantage of this loan because the profits from the money invested outweigh his costs. A revolving loan is amazing convenience. The entrepreneur borrows money when he needs it or when the opportunity arises to earn more cash.

Usually, banks specify the date when the loan must be paid back. Most often it is a year. The entrepreneur must remember to pay off the whole debt before the end of this year, and then he can borrow money once again. Many people use this opportunity. Often banks, seeing the amount of turnover on the entrepreneur’s account, automatically extend this one-year period.

Revolving loan costs

Revolving loan costs

The differences are very big. The entrepreneur has a bank account, so he is well known to the lending institution. He should receive an attractive interest rate. This is not always the case. The interest rate on revolving loans ranges from 10 to even 20 percent. per year.

Banks also specify limits on the amounts that entrepreneurs can borrow. The rule is that the longer the entrepreneur has an account, the greater the bank’s willingness to borrow large amounts of money. In extreme cases, the bank can borrow up to eight times your monthly account inflow. As in the case of regular cash loans, the bank also charges commissions for revolving loans. Usually it is 1-4 percent.

It happens less and less often, but some banks also charge a monthly fee for readiness to grant a loan. At Puttin Bank, 0.1 percent are charged monthly. the amount of revolving credit granted. A revolving loan is certainly not cheap, but unfortunately you have to pay for convenient access to money at any time.

What is worth remembering

What is worth remembering

  • Already at the stage of setting up a bank account, you need to ensure what are the conditions for obtaining a revolving loan.
  • The worse the credit history (problems with repayment of loans in the past), the lower the amount of the revolving loan and the higher interest rate.
  • A revolving loan must be repaid on time (usually after a year).
  • Some banks charge a monthly fee for readiness to grant loans.
  • The higher the monthly receipts, the higher the amount of credit granted.
  • The revolving loan, along with the account, can be transferred to another bank (if they offer us better conditions).
  • A commission is often charged for renewing a revolving loan.