Getting a loan for a company is more difficult than for an individual customer, as it is usually more complicated to verify credibility and repayment capacity. Banks may make the decision to grant a loan subject to such elements as the industry or the period of the company’s activity. In some banks, it makes no sense to apply for even a small amount before completing 12 months of operation.
Build a history of cooperation with banks
However, it should be emphasized that even established entities on the market may not have an easy way to get a loan. It can be facilitated, for example, by generating turnover on a company account at the bank. How? First of all, by “registering” all transactions in the account. This means that cash payments received from customers are better not spent in the same form, but deposited into your account.
Then, based on account history, some banks are able to make a small loan decision. If you plan to invest more in the future in the loan, it is worth using such offers earlier, of course, paying them back in time. This allows you to build a positive credit history for the company.
However, not every loan can be obtained in such a simple way. The loan amount and the purpose for which it will be used to have the greatest impact on the number of formalities that await the company applying for a bank loan. With a small amount (of 10-20% of annual turnover) of the loan in the form of a debit limit, a bank statement and an appropriate business experience required by the bank may be enough. With high amounts, which are usually needed for investments, however, the stairs are starting.
It is true that some banks declare that they are able to borrow 200, 300 or even 500 thousand. USD without collateral, but in practice it is unrealistic and above all more expensive than a secured loan. But preparing collateral is not the only portion of formalities that awaits the entrepreneur applying for a loan.
Before making a decision on granting a loan, the bank may request a number of documents, ranging from the company’s registration documents, financial documents and certificates from ZUS and Tax Office, and ending with the owner’s declaration of property. The number and type of documents largely depend on the bank itself, each has slightly different procedures related to testing the company’s creditworthiness.
Certainly, however, every bank will ask for documentation of revenues and revenues. You will definitely need to submit a copy of the tax return for the previous year (PIT28 / 36 / 36L together with PIT / B) and a number of other documents depending on how you bookkeeping. Companies settling tax based on the revenue and expense ledger will have to submit printouts from that book for the current year, and it is very likely that the previous one.
In the case of a full accounting
It will be the balance sheet and profit and loss account (P&L) for the previous year and the current period (until the end of the last month or quarter before submitting the loan application, depending on the procedure in which the documentation is prepared).
Entities using a tax card will have to submit a declaration from the Tax Office regarding tax for the current year and a VAT declaration from the beginning of the current year. The VAT declaration for the current year and PIT for the previous year is enough for the so-called ryczałtowców.
Other documents often required by lending banks are certificates from the Social Insurance Institution (ZUS) and the Tax Office (UUS) regarding no arrears in contributions and taxes. It is burdensome that in order to receive certificates you have to complete the relevant applications, file with offices, and in the case of a certificate of no tax arrears, also pay stamp duty (USD 21). In order to make life easier for potential clients, some banks deviate from this requirement, replacing it with the entrepreneur’s statement of non-arrears with ZUS contributions and taxes, possibly requiring certificates only after issuing a positive credit decision.
Think about securing your loan repayment
It also happens that banks require a business owner to submit something like a financial statement in which he or she must disclose information about other credit commitments they have and about the personal property that could possibly constitute collateral for the loan.
Security is a separate topic. It is difficult to get a loan without it, especially if it is relatively affordable. On the other hand, however, many entrepreneurs simply do not have such collateral, especially since banks often require that their value significantly exceeds the value of the loan.
A mortgage on real estate is welcome collateral for banks. Other possible options are cession on the deposit, security in the form of the company’s non-current assets or concluded contract, which will be implemented or surety from persons who are reliable for the bank, i.e. have the ability to repay the liability.
The good news is that banks increasingly rarely require business plans and financial forecasts from companies (unless it is a start-up financing). However, when applying for a company loan, you should be patient.