The lack of capital to start a business is one of the biggest challenges for organisations, especially SMEs. Consequently, getting a loan to start a business can be the solution to getting ideas off the ground.

Today, we'll show you some tips to help you understand how credit lines work and how to receive credit, as well as which option is most advantageous for your business.

Which financial institution to choose?

It is vital to investigate the banks and companies that grant loans to start a business in order to understand the terms and charges associated with the terms offered.

Read also | Credit Resources to Open a Business with Santander - Learn How to Apply

Consider two essential factors: the interest rate and the guarantee.

There are several certified companies, and if you're still unsure about the matter, you can choose to investigate those that are already well known in the financial sector.

In addition to the options for acquiring personal loans, some of them also offer online loan payment options.

Entrepreneurs should always maintain initial contact with the bank with which they already have links. This can make trading easier, but it shouldn't be a restriction on market research.

Getting a loan to start a business

Credit lines:

There are various lines of credit offered by different financial institutions on the market. They differ in the payment mechanism and interest rates, among other characteristics.

Experts advise keeping an eye on the amount of each monthly instalment, regardless of which credit option is the most desirable.

Automatic BNDES

Here, financing is provided by financial institutions recognised by the National Bank for Economic and Social Development (Banco Nacional de Desenvolvimento Econômico e Social - BNDES). BNDES. There are various types of financing with varying requirements that must be evaluated. As we all know, every business has unique requirements.

See | BNDES Loan for MEI - Understand How to Apply

Microcredit - Caixa

Caixa Econômica Federal offers a line of credit which releases a certain amount based on an assessment of the solvency and payment capacity of the company in question.

Microcredit is a form of financing for people or micro-entrepreneurs who want to start or develop a business.

The target audience is formal entrepreneurs, such as MEIs (individual micro-entrepreneurs) and legal companies, and informal entrepreneurs who don't have easy access to traditional loans or credits.

Each entrepreneur can raise up to 20,000 reais through microcredit.

The benefits of the operation include lower loan rates, exemption from IOF (Tax on Financial Operations) and ease of approval.

Credit lines at Santander

O Santander, for example, offers loan options for small and medium-sized businesses that align with their growth ambitions.

Credit solutions for cash flow management, advance receivables, working capital financing and debt renegotiation are some of the alternatives. Find out about some of them below:

• Credit card sales: ability to bring forward amounts receivable from credit card sales;
• Cheque cashing: credit as a quick way of bringing forward amounts from sales in instalments and paid for with post-dated cheques.
• Confirming: a feature that allows entrepreneurs to confirm supplier invoices and ask Santander to advance the credits;
• Santander Master: five consecutive or alternate days of interest-free financing, suitable for covering unexpected costs.
• A financing option with guarantees that allows you to manage the day-to-day operations of your business.

Depending on the type of account, Santander account users have access to all these possibilities.

Partners

Having partners can be a solution for starting a business and obtaining financing. When signing the partnership agreement, it is essential to bear in mind that the partner must be informed of their obligations and responsibilities.

Even if the partner only contributes funds, they have the right to discuss the company's social actions at a meeting.

Therefore, the social pact should be drawn up by a specialist who considers all aspects of the company, including circumstances of expulsion and financial openness.

Crowdfunding

In contrast to "vaquinha", gifts and incentives are given to donors who may be interested in your services or support your concept.

In Brazil, there are online crowdfunding sites where all you have to do is register your concept and set a fundraising target for a specific period.

To obtain value, it is essential to have a solid presentation of the company's idea, make videos, consider awards and publicise the project on social networks so that it has visibility and attracts investors.

Bank loan

Bank loans can only be taken out by correspondent banks authorised by the Central Bank.

Operating as service providers for clients of financial institutions, linking banks and financial institutions seeking financial services, often loans, to the market.

Financing for working capital

This is an intriguing financing option for small and medium-sized businesses that want funds to cover their operating expenses - also known as working capital.

In this scheme, the entrepreneur is not obliged to specify the purpose of the loan when applying. You can also choose between fortnightly, half-yearly or full payment on completion of the contract.

It's important to remember that this type of credit is advantageous for short-term needs, as the typical repayment period is 12 months.

See more:

• Caixa releases new credit for MEIs and PF: Understand how it works!
• MEI BNDES Card: Discover the exclusive benefits for PJs!
• Pj loan: Interesting financial resource for companies

Credit unions

Credit unions offer credit products comparable to those of a typical financial institution, such as credit cards, financing and working capital loans, with the aim of supporting regional development in the best interests of the community.

As a non-profit company, they are exempt from taxes such as CSLL (Social Contribution on Net Profit), PIS (Social Integration Programme) and Cofins, guaranteeing better credit conditions.