In Belgium, most companies are SMEs , that is, Small and Medium- sized Enterprises. When they suffer from cash flow difficulties, it is not uncommon for a request for the granting of credit, over a short and determined period, to be made up to compensate for the temporary lack of liquidity. Unfortunately, the subscription of such a loan is refused by many banks and brokers.
Focus on this subject.
Can an SME take out a loan?
An SME has the legal right to obtain a loan. Nothing therefore prevents him from taking the necessary steps. However, there are few banking or credit organizations agreeing to grant a loan to this type of business. The financial situation of the SME is very often in question. Indeed, the variation in the results of commercial activity, as well as the instability of the firm’s earnings, prevent the companies allocating loans from having a global idea of the state of work of the SME.
What are the specific difficulties of SMEs?
Very often, the activity of an SME works wonderfully. However, it is not uncommon for it to temporarily lack liquidity. The deadline of one month is therefore exceeded for the payment of invoices and sometimes extends up to three months. This phenomenon then leads to a series of difficulties. The company is therefore obliged to apply for a loan in order to remedy the various problems encountered.
How to solve these difficulties?
Knowing that it is impossible to take out a loan as a legal person (that is to say, as a company), another solution is then possible: request the allocation of the loan as a natural person. Therefore, the loan is made by the managers or administrators of the company. However, these are not, in the majority of cases, employees but many shareholders and also freelancers. As a result, some difficulties will hinder the allocation of credit.
What about credit for the self-employed?
Like an SME, an independent person is legally authorized to obtain a loan. Finding a loan is complicated, however. Indeed, the instability of his income, as well as the variation of his financial situation, causes many difficulties for this person such as the non-visibility of his state of work by the credit broker. In addition, the deadline for paying invoices also ranges from one to three months.
At Fine Bank, it is however possible to take out a loan as a self-employed person because our staff includes a specialist in this field. However, only mortgage loans are granted to the self-employed thanks to the guarantee provided by the mortgage. To do so, the self-employed person is obliged to be the owner of a property free of all charges or to be a joint debtor with a person possessing this type of property.