Table of Contents
Main types of loans based on the purpose of the funds
Types of loans based on the field of activity
Steps required to obtain a loan for a legal entity
Regardless of the growth stage your business is in, there may come a time when additional funds are needed. Many companies, both large and small, use borrowed capital to fuel growth and finance other business initiatives. Whatever the need, a loan for a legal entity is one of the most sought-after financing methods.
Main types of loans based on the purpose of the funds
In general, you choose a business loan depending on your company’s needs. Since you don’t want to overextend yourself financially, you carefully analyze the non-banking loans for legal entities offered by Mikro Kapital.
1. Working capital loan
If you opt for this type of loan for a legal entity, it can be used for inventory purchases, supplier payments, salary payments, taxes owed to the state, as well as refinancing working capital loans from other institutions.
2. Investment loan
With this type of loan for a legal entity, the funds may be used for purchasing vehicles, machinery, or real estate, setting up business locations, as well as refinancing investment loans from other institutions, among other purposes.
3. Fast loan with mixed purpose
This refers to any combination of the two types of loans: working capital loans and investment loans.
Types of loans based on the field of activity
1. HORECA loan
The value of this type of loan is up to RON 45,000 with a personal guarantee and can reach up to RON 700,000 with a personal guarantee plus collateral in the form of real estate. You may choose a working capital loan, an investment loan, or a mixed-purpose loan.
2. Agriculture loan
These loans start at RON 2,000 and can go up to RON 700,000. They cover the purchase of agricultural land, necessary machinery, or other investments specific to agricultural producers. The advantages of this type of loan for legal entities include zero down payment and a flexible repayment schedule.
3. E-commerce loan
You can submit an online application to obtain a fast loan. With minimal documentation, you can receive amounts ranging from RON 2,000 to RON 700,000 as a solution for business development: working capital, investment financing, or mixed-purpose loans.
4. SupeRRapid loan
The last option is a fast loan with instant online pre-approval, through which you can receive RON 70,000.
Steps required to obtain a loan for a legal entity
1. Research and preparation
Before applying, it is important to understand how your loan application will be evaluated by the lender. A lender’s willingness to grant a loan is largely based on assessing the borrower’s ability to make each scheduled payment. With this in mind, lenders consider your personal credit score, business credit history, cash flow, time in business, collateral, industry, and loyalty.
Although you don’t need to be an expert in business financing for legal entities, given the wide range of available options, you should focus on choosing the type of financing that best meets your business needs and matches your company’s credit situation.
Options include both bank loans and financing provided by non-banking financial institutions:
- loans for small business management;
- traditional bank loans;
- non-banking online loans;
- merchant cash advances;
- cash-flow-based lines of credit;
- business credit cards for legal entities;
- supplier financing;
- lines of credit.
2. Choosing a lender
Now that you know which loan product suits your needs, you can move on to selecting a lender.
Not all lenders offer all the services listed above, so you’ll want to narrow your search to those that provide the type of financing you need and are most likely to approve your loan application based on your creditworthiness. Some lender requirements may be manageable, while others may be impossible to meet.
A bank offering a higher interest rate than you would ideally want is not necessarily a closed door, but it may not be the best choice. Make a list of the aspects you are willing to compromise on if necessary and carefully review the offers from financial institutions to see whether negotiable terms are mentioned.
While some lenders may pre-qualify you for a loan based on existing information, the actual loan application process will likely require a detailed review of your credit report. Filter your initial loan applications to those where you are most likely to succeed.
3. Obtaining the required documents for a business loan
For a bank loan for your company, you will need a substantial amount of documentation to obtain approval. Below are some of the most commonly required documents, though this is not an exhaustive list:
- business bank account statements;
- tax returns and supporting documents for both business and personal tax accounts;
- any applicable licenses and registrations;
- other relevant financial documents (credit card sales, unpaid invoices, accounts receivable);
- various legal contracts that may be relevant (franchise agreements, incorporation documents, leases).
You may also need:
- business forecasts detailing cash flow and future costs;
- documentation proving underrepresented status (for loans aimed at women-owned businesses, for example);
- an updated business plan with details about your growth and marketing strategies.
The short answer to the question “What should I bring?” is that you should be prepared to include any paper or electronic document you used when creating your business plan. Banks will not simply take your word that you will be profitable—they need to assess the risk of repayment. That is why they require documents and banking records that validate your creditworthiness.
4. Submitting the application
The application rules are generally the same, whether you are filling out forms in an office with pen and paper or completing them online from home.
Online applications usually receive an immediate response when applying for an investment loan for a legal entity from a non-banking financial institution. The same applies to investment loans for SMEs or start-ups.
If the application is submitted to a bank, however, the response time may vary depending on the requested amount and the conditions met.
A legal entity at the beginning of its business journey or seeking expansion will certainly need financial support to implement its business plan. Once needs are identified, they can be addressed with the right type of loan.
There are many types of fast loans for legal entities, depending on the nature of the activity and the purpose of the funds, making it essential to choose the most suitable loan.
Grow your business simply and quickly by applying for an SME loan offered by Mikro Kapital.
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