Published on : 22 April 20202 min reading time
Banks play an important role in the national economy. Even after the explosion of crowdfunding or participatory financing, recourse to banking institutions remains unavoidable for most companies to solve cash flow problems and to implement new projects through many services.
The different types of credit for companies
Loans for professionals are grouped into several categories, which can meet very specific needs:
Leasing: thanks to this type of credit, a company can use a good (movable, real estate or vehicle) without having to buy it.
The amortizable loan: it can finance different types of professional projects
Revolving credit: a very interesting solution to solve short-term problems
Cash credit: used to provide a company’s cash flow.
Factoring: this is an advance made by the financial institution on the basis of invoices not yet due in order to avoid delays and unpaid invoices.
Inventory credit: this is intended to finance stocks which require a significant amount of cash.
Bank overdraft: the amount is estimated at 15 days to 1 month’s turnover depending on the bank (online or traditional bank) and the sector of activity.
the loan of honour
trade discount, etc.
Banks: major players in financing businesses
Each year, there has been an increase in business financing by banks. The main targets are VSEs and SMEs. This is due to the fact that the number of projects is constantly increasing while resources are insufficient. Last year, the figures are truly staggering. For example, more than EUR 200 billion was granted to finance cash requirements and more than EUR 600 billion for investment needs.
Moreover, the use of bank credit has become more attractive for professionals since rates are currently very low: 1.86% on average in France and 2.23% for the rest of the Eurozone. Finally, the granting of bank financing has been made easier. Procedures are simpler and the waiting period has been reduced.
Credit for all needs!
Depending on the company’s needs, banks can offer repayment terms of varying lengths (from a few months to several years) and personalised formulas. For example, banks can suggest bridging loans for larger long-term funding requirements. This way, everyone can benefit. Moreover, with competition becoming increasingly fierce, and with online comparators, it is easier nowadays to find the formula best suited to one’s needs at the best price.