Where to get a start-up loan?

It is no secret that companies making their first steps on the market have serious problems with obtaining financing. A lot of companies fail in the first 12 months. It is no wonder that for banks they are not very credible as borrowers.

However, it is worth knowing that having appropriate seniority is not a hard criterion for granting credit in many banks. Some institutions have prepared a special financing offer for start-ups. In which banks can a beginner entrepreneur with less than a year of experience seek financial support?

The loan offer for companies that have just registered their activities


Is theoretically not scarce. In practice, however, for a loan, especially exceeding 10-20 thousand. USD, it can be difficult. The more it is worth knowing where a start-up company can seek financial support.

Good Finance Bank is one of the banks where you can apply for a loan from day one. He has prepared a special offer for start-ups Loan for start + One year without ZUS, under which you can receive up to 100,000 USD without collateral on own assets, thanks to government support in the form of guarantees.

If a novice entrepreneur has the option of securing a loan with a mortgage on real estate, he will be able to borrow up to 350,000 USD Additionally, the offer is made more attractive by the fact that for the first 12 months of the loan period the bank will pay the entrepreneur a bonus of USD 400 per month (this is the amount that almost covers the monthly ZUS contributions of a novice entrepreneur, hence the wording “Year without ZUS” in the offer name).

However, to take advantage of this promotion, you must meet additional conditions, i.e. set up a company account at Good Finance Bank and pay ZUS premiums on time (!), Conclude an accounting contract with Tax Care, and repay loan installments on time. The minimum loan amount entitling to participate in the promotion is 50 thousand. USD.

Another Good Finance bank available for newly established companies is working capital loan, which can be used to purchase means for production or commercial goods. This loan is available without additional collateral. To obtain more attractive conditions, i.e. lower interest rates, it is worth trying to obtain collateral, e.g. in the form of movable property, real estate or assignment from the contract.

A loan for the company after a few months

A loan for the company after a few months

A working capital loan in the credit account guaranteed by the European Investment Fund at Bank Good Credit SA allows you to borrow up to USD 20,000 USD to the company that issued at least one invoice or one invoice paid by the contractor. Funds from the loan can be used for current purposes, i.e. purchase of commercial goods, production means etc.

The loan may be granted thanks to a free EIF guarantee, constituting security up to 50% of the loan value together with interest.

With a loan up to 10,000 USD, sufficient collateral is the EIF guarantee and a declaration of submission to enforcement and a power of attorney to use a bank account, with a higher amount additional security is necessary.

The internship does not count, the plan counts


Some banks have prepared a special loan offer for start-ups, often available only thanks to governmental or EU support. What about the standard credit offer for companies? When can a young company count on a positive consideration of its application?

Some banks set the limit on the minimum company seniority (usually 12 months, sometimes 18 or even 24 months) from which credit products are available. For some institutions, however, the business plan, collateral and also credit history of the business owner are more important than the internship.

In a situation where the company has neither documented income for a fairly long period nor credit history, the bank may scan the owner. If he took loans from banks in the past and repaid them on time, the chances of getting a loan for a company increase.

What is bridging insurance? – Repayment of Loans

A special type of financial liability is a mortgage, in this case, additional fees may arise even more. They include, among others bridging insurance. This is often overlooked credit thread, which is of great importance. What is bridging insurance and who should it protect?

There is no need to buy insurance for a cash loan. However, this issue looks completely different when we reach for a mortgage.

What is bridge insurance for mortgage loans?


Few people have come across the concept of bridging insurance. It is borrowers who decide to take out a loan to buy real estate. Then, they often reach for a mortgage calculator. It is also worth knowing that bridging insurance has a real impact on the amount of credit that a borrower can apply for.

What exactly is it and what exactly is bridging insurance? Each bank that grants mortgage customers must be properly insured against insolvency. Such security is an entry in the land and mortgage register.

Before it is concluded, however, usually a few weeks pass, and the bank is obliged to withdraw cash immediately after signing the loan agreement. To avoid a situation in which it may turn out to be lossy, bridging loan insurance was introduced until an entry into the mortgage was obtained.

This is a kind of guarantee of compensation for any loss of rights to the mortgage that may occur if the consumer fails to repay the loan. Therefore, bridging mortgage insurance is to protect the bank’s interests.

Is bridging insurance compulsory?


A loan with insurance is almost a river topic. However, while loan insurance is in most cases non-compulsory, bridging insurance is governed by slightly different laws.

Bridging insurance is obligatory in the vast majority of cases, so it cannot be avoided. Securing against the borrower’s insolvency is a priority for the bank.

However, you do not have to worry about it because it is temporary insurance. What does this mean in practice? It applies until the entry in the land and mortgage register has been established.

When does the customer sign the bridging insurance?


The customer signs bridging insurance with the loan agreement. The bank secures the mortgage by increasing the interest rate. It is this additional cost that is added to the contract as bridge insurance.

When the entry to the mortgage appears, the interest rate is reduced by the rate of this insurance. If it happens that, despite making an entry to the mortgage, an additional fee will still be charged, the borrower may apply for a refund of overpaid bridge insurance.

How much is bridging insurance?

Bridging insurance takes the form of an increased margin. However, it is difficult to talk about its fixed amount, because each bank sets it individually. In most cases, it ranges from 1% to a maximum of 2%.

In some cases, banks replace the margin with a one-off payment, the amount of which is a designated percentage of the loan amount. Then it is this amount that is the collateral for the bank until it is registered in the mortgage.

How to calculate bridging insurance?


To calculate the amount of bridge insurance, it is worth using a special loan calculator. You can also do it yourself.

Let’s assume that the loan amount requested by the borrower is 250,000 USD. Its interest rate corresponds to the market average for loans in USD, i.e. 5.82%. Therefore, the installment of the loan taken for a period of 25 years amounts to USD 1,583.36. If the bank raises the margin by 1% for bridging insurance, then the installment increases to USD 1,738.35.

If the margin increased by 2%, the installment equals USD 1,899.83. The installment increased by bridge insurance is, therefore, higher by USD 155 and USD 316 respectively.

Assuming that the establishment of collateral will take three months, the cost of the loan would be higher by USD 465 for bridging insurance in the amount of 1% and by USD 948 if the insurance increases the interest rate by 2%.

When is the bridging insurance paid?


In the secondary market, the borrower pays the cost of bridging insurance from the moment the loan is disbursed. The situation is slightly different when the consumer decides to buy real estate from the primary market.

Then the insurance should be paid from the moment of paying out the first tranche of the loan.

When should I pay for bridging insurance?


The bank has the right to collect bridging insurance only until an entry in the land and mortgage register has been established . Until when is the bridging insurance paid? Up to the same time.

Collecting fees for bridging insurance after this day is against the law. Therefore, bridging insurance lasts from the payment of the loan until the date of entry of the property in the land and mortgage register.

Are there banks where bridging insurance is not required?

It may happen that the bank will not require bridge borrower insurance. In this situation, it is replaced by a one-time fee, which we have already mentioned above. However, this happens relatively rarely.

Does the bank return bridge insurance?

If the bank charged a fee related to bridging insurance after entering the property in the land and mortgage register, it is obliged to return it.

It should be borne in mind, however, that customer claims against banks for the return of bridge insurance expire after 10 years from the date of payment.

How to regain bridge insurance? The consumer must apply to the bank for a refund of the amounts due. If the bridging insurance is not returned, the case should be referred to court.

Loan types: what types of consumer credit are there?

What forms of consumer credit are there?

What forms of consumer credit are there?

If you want to borrow money, you can choose from a very large number of loan types. Think of a mortgage if you want to buy a house or a car loan if you want to buy a car. This site specifically concerns consumer loans that you as a consumer can take out from a lender. 

What is a consumer loan?

What is a consumer loan?

Loans come in many variants, but in the end it all comes down to: you borrow money, you pay interest on it and you have to repay (periodically) immediately or at a later time. A consumer loan is a loan in which the money is used for consumer spending. Think of a loan for buying a car or giving a wedding or a loan that you take out to get some more spending space. Consumer loans come in two basic forms: the personal loan and the revolving credit.

Differences between revolving credit and personal loan

Differences between revolving credit and personal loan

The main differences between a revolving credit and a personal loan are the flexibility and type of interest. With a revolving credit you can withdraw repaid amounts up to the original loan amount. That is not possible with a personal loan. If you want to borrow again with a personal loan, you must apply for a new loan. This makes the revolving credit more flexible than the personal loan.

Another important difference is the interest. The interest is variable with a revolving credit. In theory, this can change daily. With a personal loan you have a fixed interest for the agreed term. So with a personal loan you know exactly where you stand.

Types of revolving credit

Types of revolving credit

The most well-known revolving credit option has already been described above, but also a credit card and buying on credit from a store is usually a form of revolving credit. In these forms, too, there is often a credit limit where you can withdraw already repaid amounts.

Types of personal loan

Types of personal loan

Personal loans include loans that you pay off monthly and where you know exactly when the loan has ended. This form is often used for the purchase of products whose value decreases quite quickly. Think of a car. A personal loan is therefore also referred to as a car loan. But a personal loan can also be useful for the purchase of goods such as a kitchen or washing machine or for financing a holiday. As soon as the car, kitchen or washing machine is due for replacement, you are off the loan. A pleasant thought.

You can also use a personal loan to finance renovations to your own home. The characteristics of the PL meet the requirements for the mortgage interest deduction, making the interest you pay deductible for income tax just as much as that of a mortgage.

What does a loan cost? Calculate monthly amount for your loan.

Indication of your monthly amount

Indication of your monthly amount

The monthly amount that we can calculate for you in the above calculation is an approximation of the actual monthly burden. Due to rounding differences, this amount may differ slightly from the monthly charge that a lender calculates. Of course, in the end, the calculation of the bank is leading in what you will actually pay per month.

Monthly charge revolving credit

Monthly charge revolving credit

You cannot choose a loan form for the calculation: the monthly charge for a personal loan is calculated here. The amount you pay per month with a revolving credit does not depend on interest and term – it is simply a percentage (1%, 1.5% or 2%) of the agreed credit limit. If you have a limit of $ 10,000 and a monthly charge of 2%, you pay $ 200 per month.

Monthly charge = interest + repayment

The monthly charge of a loan consists of interest and repayment, both with a personal loan and with a revolving credit. The distribution of the monthly charge over interest and repayment works differently for these two loan types.

Interest and repayment on a personal loan

A personal loan is a fixed agreement: all data is recorded when it is taken out. The interest rate is fixed, the monthly amount and therefore also the term. Part of the interest is always taken from the fixed monthly amount (calculated on the outstanding debt) and the rest is repaid on the loan. The monthly amount is calculated exactly so that you have repaid the entire loan at the end of the term.

Interest and repayment with revolving credit

Revolving credit is much more flexible: the credit limit is fixed there and the monthly amount is no more. The monthly amount is a percentage of the agreed limit. After collecting the monthly amount, it is first calculated how much interest (the percentage is variable) you owe on the outstanding debt (which can vary because you can repay and withdraw amounts at your own discretion).

What remains of the monthly amount is used for repayment. Because you do not know in advance how the interest rate will develop and you do not know how it will go with withdrawals and repayments, you cannot know in advance how long you will take to repay the revolving credit.

Higher monthly amount = ready faster and lower costs

Higher monthly amount = ready faster and lower costs

Can you miss more than the monthly amount we calculated for you above? Then look at what comes out if you choose a shorter term. Then the monthly amount increases, but you get rid of your loan faster. This ensures that you ultimately pay less in total: the total costs are lower. The faster you pay off on your loan, the less interest you have to pay.