Regardless of the size of the company, everyone needs money to start, maintain and grow. In addition, a small company has fewer opportunities and cannot choose between the methods of financing an enterprise. This does not mean, however, that it remains in a stalemate and will not do anything without its own resources. A small company also has opportunities. To finance an enterprise, it can allocate not only its own funds, but also money from a loan or items derived from leasing .
The financing of the enterprise through credit is mainly targeted at small and medium enterprises. This is due to the fact that large plants have much more opportunities and credit is not the best solution for them. Due to the fact that a small company cannot offer all available solutions, a loan may be a good solution thanks to which we will finance a company.
One of the types of credit available to small and medium-sized companies is a working capital loan. The working capital loan is intended to cover the current expenses of the company. Thanks to it, the company’s financial liquidity is maintained. It is useful not only in crisis situations, when we do not have the money to cover all debts. It is also used in the case of seasonal companies, which need a cash injection before the season, which in a short time they are able to catch up with more. The working capital loan is a short-term loan. The loan period is from 1 to 2 years.
The investment loan is intended, as the name suggests, for the purchase of assets that are to serve the company’s development. Thanks to it, for example, we will modernize production, buy new machines or buy modern technologies. This is an investment loan . The loan period is much longer than for a working capital loan and is even 15 years.
If we are a newly opened small company, we don’t have much chance of credit. It is worth remembering that credit is not the only solution. There is also a lease agreement, which assumes that one party to the contract transfers the other thing that he can use. In return, he agrees to pay the lease installments. The lease agreement is less formal, and due to the fact that the entity that gives the item into use is its owner at all times, the security of the lease is greater than the loan, which makes it easier to obtain even a new company. No creditworthiness is required at the same level as for a loan.