Lend money – where?

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Lending money to friends or acquaintances you call private borrowing. The advantage of this is that you can arrange everything quickly and easily and that you can also borrow with a negative BKR registration. Be careful when providing a private loan.

Lending cheaply to your friends may seem attractive, but there are also disadvantages. Therefore always make sure that you record all agreements made in a contract.

Borrowing money, doing it or not?

Borrowing money, doing it or not?

Advancing a dinner once will probably not lead to difficulties. But lending a larger amount is another story. Why does your friend want to borrow money from you? Does he want to start a business and is he looking for starting capital or does he have financial problems?

If there is a healthy financial situation, you can consider borrowing money. But if your friend already has financial problems or debts, it’s better to see how you can help them out instead of borrowing money.

Example contract loan friends

Example contract loan friends

Does lending money to your friend fit both with you and with him? Then of course you can lend the money. But make sure you record everything properly in a contract. At the moment you may think that a contract is not necessary, but when it comes to money, even the best friends can do crazy things. Then you better have the agreements made in black and white.

The contract states, among other things, the date and your personal details, the amount you borrow, which interest rate charges you for this, and when and how your friend repays. The contract must then be signed by both of you. You can find a handy example of a contract on the website .

Lend money to friends – Tax

Lend money to friends - Tax

If you lend more than 2,129 dollars, you should always charge a market-conforming interest rate of at least 6 percent. If you do not do this, the Tax Authorities will not see this as a loan, but as a gift and your friend will pay gift tax on the part above USD 2,129.

If you don’t want your friend to pay interest rate, you can use the exemption to return the interest rate. Make sure that the interest rate that your friend pays does not exceed 2,129 dollars, after which you return the same amount.

Lend money for the home

Lend money for the home

Lending money to a friend to finance a home works almost the same, only you have to record this loan in a notarial deed. The notary explains exactly what must be stated in this deed and what this deed costs. Do not be put off by the costs, because only with this deed does your friend, for example, have a right to a mortgage interest rate deduction.

Borrow money without a permanent contract

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Many lenders only provide loans to consumers with a permanent contract. But what if you do not have a permanent contract, but for example a benefit or temporary employment contract? Can you still borrow money?

Apply for a loan without a permanent contract

Apply for a loan without a permanent contract

With many lenders it is possible to apply for a loan without a permanent contract, especially when it concerns smaller loan amounts. Credit providers often set additional conditions.

For example, if you are 25 or older and married, that you have worked for at least two years in the past and that you do not have a negative registration with the BKR. If you meet these additional conditions, you can borrow from many lenders without a permanent contract.

Borrow money without a permanent contract

Borrow money without a permanent contract

Do you have a temporary contract? Then you increase the possibilities to borrow when you have a letter of intent from your employer. In this statement, your employer states that he intends to continue your temporary employment with an employment contract for an indefinite period. This gives the lender more guarantee that you will also have sufficient income in the future to bear the monthly costs of the loan. On this site you will find an example declaration of intent.

Loan without a permanent contract – Self-employed

Loan without a permanent contract - Self-employed

Even as a self-employed person you do not have a permanent contract. Your income can fluctuate monthly, for example as a result of the company results and / or investments. And that in turn influences your personal spending space. To see if you as a self-employed person can bear the monthly costs of a loan, lenders often rely on the annual figures for the past three years. Consult this with your bank to see what the options are for a loan.

A loan without an indefinite employment contract is difficult to obtain. One of the basic requirements that banks demand for a loan approval is the permanent employment contract.

The income stated in the employment contract gives the bank the necessary security that applicable installments can also be paid. Therefore, loan seekers must expect difficulties in the loan commitment.

 

Starting capital for your company: 5x starter loans for entrepreneurs

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Nothing is more beautiful than fulfilling your entrepreneurial dream, but often you need investments in addition to a Chamber of Commerce registration. How do you get the required starting capital to get your own business off the ground? Most start-ups need financial assistance when setting up their business. Nowadays you can opt for all kinds of alternative financing that are often arranged quicker than a starter loan from the bank. In addition, you often need sufficient equity and a business plan to take out a start-up financing with the bank.

As much as we would like to help starting entrepreneurs, at Forsyte family we are not (yet) able to provide financing to starters. We need sufficient financial data to calculate your credit score. As a starter you do not have this financial data, such as your annual statement, available yet. We can help you further if your company has been registered with the Chamber of Commerce for 15 months.

We are happy to think along with you: what are your options if you do not have a big money box and do want to make a kickstart with your company? In this article we list the various financing options for starting entrepreneurs, including the advantages and disadvantages. This way you can choose a starter loan that fits your company.

Starter financing

Starter financing

Do you already have a detailed business plan or can you use some help with the development of your business model? In both cases you can go to : an online lender that, in addition to existing entrepreneurs, also helps start-ups set up a business. Do you need a microcredit between 5,000 and 250,000 dollars to finance the start of your business? Then the right place for you. To make a financing application, you do need a business and a financial plan. In addition to financing, also has other products to help entrepreneurs with a successful start.

  • Benefits
    A business advisor assesses your business plan and your financial forecast. You can explain your plans in person and increase the chance of financing with a solid story and business model. If you only have a fantastic idea, the coaches can also help you to turn it into a solid plan.

  • Cons
    Do you need financing as quickly as possible? Keep in mind that it takes a little more time before your financing application is approved. You receive an offer after you have had a meeting with the business advisor to discuss your business plan.

Crowdfunding: different types of campaigns

Crowdfunding: different types of campaigns

Another option to finance the start of your business is crowdfunding. Instead of borrowing from a bank or an individual institution, you arrange your starting capital with a large group of people, or the ‘crowd’. In the media you often read success stories from companies that have had a flying start with crowdfunding. Yet there are also rules attached to crowdfunding and you have to thoroughly study the conditions if you go for this option. In the country there are various platforms for crowdfunding. Which platform suits you best depends on your sector and the conditions that you find important. There are different forms of crowdfunding:

  1. Investments or loans: Are you asking the crowd to make financial investments in your company? Then this means that you have to repay the money, just like with other loans, usually with interest.

  2. Presale: By selling your products or services to the crowd before you actually deliver them, you have extra capital to invest.

Are you going to finance starting capital with crowdfunding? Then you not only conclude an agreement with a group of private investors, but also with the crowdfunding platform itself. Make sure you read the conditions carefully. With most platforms you can set many things for your collection round yourself, such as the amount or duration of your loan, but there are also platforms where you cannot determine the rules yourself.

  • Benefits
    With crowdfunding you are not dependent on one financier, which gives you more certainty that the financing will continue. An even more important advantage is that you can already test your business plan among a group of people before you actually start. If you raise a lot of starting capital or donations, this says something about the chance of success for your company.

  • Cons
    You need to bring out a lot of information about your company to convince your potential investors. The interest that you pay on your financing is often higher than at regular financial institutions. It is also possible that you get few responses from the crowd on your campaign and you therefore do not raise enough funding.

Loan with trial period.

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The trial period enables employees and employers to get to know the work performed and the working atmosphere and to decide on the continuation of the employment relationship based on the experience gained. It usually lasts six months and thus corresponds to the period in which the protective effect of the Protection against Unfair dismissal does not apply. Shorter or longer trial periods than half a year can be agreed, but have no influence on the legal protection against dismissal.

Borrowing from financial institutions during the trial period

Borrowing from financial institutions during the trial period

The employment relationship is not secured during the trial period, as termination is even possible without a specific reason. As a consequence, financial institutions are reluctant to grant a loan with a trial period. Even if the employment contract is not submitted, this can be seen in the payroll, especially since financial institutions treat the first six months of a new job as such even with a shortened trial period.

Employees can often avoid the need for a probationary loan by taking out the loan while still with their old employer. In this case, they make sure that they can also pay the installments if the new contract is canceled during the trial period.

If the need for money was not foreseeable in time, a loan with a probationary period is an immediate loan without proof of salary. In this case, financial institutions have to ask their previous employer about their income, but not necessarily about the start date. The best chances of successful borrowing during the trial period are if the instant lender only asks about the income from work and not about contract details. All questions asked must be answered honestly, even if the instant lender does not require proof.

Personal loan during the trial period

Personal loan during the trial period

Internet platforms for private loan brokerage accept loan seekers with employment relationships that are not considered secure. The decision on the loan is made exclusively by registered private lenders. They learn in the project description that an applicant would like to take out a loan with a trial period.

For social reasons, many private lenders registered on the platforms deliberately draw loan requests from members that conventional banks are reluctant to grant loans to. For this reason, a loan with a probationary period with good chances of success can be applied for via the internet platforms for brokering private individuals. An as precise as possible statement of the intended purpose also contributes to the success of the loan application.

Repaying a business loan: is early repayment smart and what is deductible?

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If you have your own company, chances are that you are already working on the next step in your head. With a growing company, you cannot always pay for investments out of your own pocket: a business loan offers a solution. If you are considering applying for a loan, you first want to know what this means for the financial situation of your company: how do I repay the loan, what is my monthly amount and over what period do I pay off? In this article you will read everything you need to know about paying back your business loan, paying off early and what costs you can deduct from your profit. In this way you know exactly where you stand and you can consider whether an SME loan suits your company.

Repaying a business loan: this is how it works

Repaying a business loan: this is how it works

When you take out a loan for your company, you always make agreements about how you will repay. The most common form is a linear business loan, where you pay interest and repayment every month. You immediately start paying off. The composition of your monthly amount changes: in the beginning you pay more in interest and then the repayment part becomes higher. Good news: at the end of the term you have fully paid off the loan through your monthly repayments. Less common is the business annuity loan, where you initially only pay interest and no repayment on your loan. This loan form can be interesting if you want to be sure about your monthly amount, since you pay the same amount every month.

Example business loan
You borrow USD 54,000 with a term of 3 years. For this you pay a monthly installment and a partial interest for this. With an interest rate of 3.1% in the first month you end up with the following costs on average:

  • USD 1,500 repayment + USD 46.50 interest = USD 1546.50 per month

With an interest rate of 9.1% you end up with the following monthly payments:

  • USD 1,500 repayment + USD 136.50 interest = USD 1636.50 per month

You pay repayment from the first month, which means that your monthly expenses will continue to fall.

What is the duration of a business loan?
The term of your loan usually depends on the intended financing objective. For example: real estate financing has a longer duration than financing for a car. If your loan has a short term, you repay more each month and your monthly amount goes up. You cannot withdraw the amount that you have repaid. If you want to withdraw money flexibly to pay for your daily expenses, a business credit suits your situation better.

Early repayment: what does this mean?

Early repayment: what does this mean?

For many entrepreneurs, the income can vary quite a bit, especially if your company is in the growth phase. If you have extra financial resources available, you want to be able to repay your loan early. What are the benefits of early repayment? In general, early repayment on your loan can be smart: the interest you pay on the borrowed money is usually higher than the interest on your savings account. By early repayment the amount of your loan decreases and you pay less interest. You may also be able to better use additional financial resources to purchase products or assets so that you can serve more customers. Consult with your bookkeeper or financial advisor what best suits your business.

Lower monthly payments with extra repayments

If you pay off your business loan early, you are usually cheaper each month. The balance of your outstanding loan decreases, so you pay less interest. Bear in mind that with most financiers you have to pay off before a certain date, if you want the extra repayment to have an effect on your monthly amount.

If you make an extra repayment on your loan before the 10th of the month, the amount to be paid for that month decreases. If you pay off extra after the 10th of the month, then your repayment has no effect on the depreciation of your standard monthly installment including interest for this month. We then settle it with your monthly installment for the following month.

Is my loan tax deductible?

Is my loan tax deductible?

With your own company you pay tax on your profit. The more deductible items you can deduct from your profit, the lower the amount you owe to the tax authorities. Which costs for a business loan can you deduct from the tax? To start with, you can deduct the closing costs, just like the interest you pay on your loan. You can deduct the total amount that you pay in interest in a year, for example USD 6,000 on a loan of USD 150,000, from your profit. Interest payments are considered by the tax authorities as business costs: you pay for the borrowed money. Repayments, on the other hand, fall into the expenditure category and this is not deductible from your total profit.

Loan for entrepreneurs – new from Good Credit!

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Finnish company Good Credit entered the Czech in 2007 as the first provider of short-term loans before payout. Newly, Good Credit also offers a Good Credit Business loan for entrepreneurs.

The company even has its own website for this loan. It is a separate product, which differs significantly from the other loans of this company and in a way actually distances itself a bit.

Good Credit Business offers a business expansion loan of up to USD 1.3 million with a maturity of up to 18 months.

The company’s approach to this loan is similar to all others

The company

Good Credit is also trying to avoid excessive paperwork and unnecessary formalities, even for business loans.

This allows you to easily apply for a loan online in a few minutes, directly on the business loan website and find out if Good Credit will lend you how much and under what conditions.

It is up to the entrepreneur applying for a business loan to decide whether he is interested in the loan under the offered conditions.

Application for a Good Credit Business loan

Unlike a classic application for a Good Credit loan, when applying for a Good Credit Business for Entrepreneurs, you will fill in information about your company.

You’ll need your company email and phone for the first time, then all the other information about your company from where it’s located or its legal form.

The questionnaire will also ask you about the business period, branch, purpose of the loan and of course your monthly turnover, company ID and company account number.

The next part of the questionnaire will ask for your personal information and then you can go to the summary and wait for the offer Good Credit will give you based on the information you entered.

Who can get everything Good Credit Business?

Who can get everything Good Credit Business?

The Good Credit Business loan is intended for companies based in the Czech Republic that have been operating for more than 12 months.

However, not only the company must have its registered office in the Czech Republic. Also, all owners of your company must have a permanent address in the Czech Republic.

The company must also have its own business account.

What can Good Credit Business be used for?

Good Credit Business is a loan ideal for expanding your existing business.

Whether you are planning to hire new employees or move to new premises, Good Credit is here for you. Do you want to buy new, more modern equipment? This loan will also help you with entrepreneurs.

In addition to the loan itself, Good Credit also offers business and finance advice on its blog.

The business loan from Good Credit is without liability or guarantors, only you have to guarantee it.

How much can I borrow? – Everything you should know when you borrow

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Not more than 85% of the value of the home. This means that if the housing costs 2 million, at least USD 300,000 is required for the cash contribution and the remainder you can borrow with the housing as collateral.

Of course, when it comes to how much you get to borrow in total, income is important, but there are also other important factors that come into play. Good Credit explains the most common concepts.

Mortgage cap

Mortgage cap

For starters, your borrowing space is limited by the so-called mortgage loan. This applies to mortgages taken after October 1, 2010, and introduced at the request of the Swedish Financial Supervisory Authority.

It was thought that mortgage lending in Sweden had increased too much and the idea of ​​the mortgage ceiling was to slow down the price trend for housing. Previously, you could sometimes borrow up to the entire value of the home from one and the same bank.

After the mortgage ceiling was introduced, the mortgage may be at most 85% of the value of the home, this is what is called a mortgage loan. In the last 15%, as a buyer, you have to stand for yourself, which is called cash installment or down payment.

If the home is worth USD 3,000,000, the home loan can thus be USD 2,550,000 at most. The cash contribution will then be USD 450,000. In practice, this means that the purchases must save money. But it is also possible to borrow the investment with a private loan.

Repayment Requirements

Repayment Requirements

In order to slow down the housing market’s price rally, the amortization requirement was introduced. It is based on the loan-to-value ratio and applies to loans taken after June 1, 2016. The loan-to-value ratio is a way of measuring how mortgaged the home is.

You can calculate the loan-to-value ratio by dividing the total loan amount by the present value of the home. If you have a loan of 500,000 and the home is worth 1,000,000, you will then have a loan-to-value ratio of 50% (500,000 / 1,000,000 = 0.5).

The repayment requirement means that a mortgage with a loan-to-value ratio of 50-70% must be repaid annually with at least 1% of the loan amount. If the loan-to-value ratio is greater than 70%, the loan must be amortized by at least 2% of the loan amount.

This requirement for repayment affects how much you can borrow since the banks need to take into account that you must be able to repay the loan at least the required rate.

How much can I borrow based on income?

How much can I borrow based on income?

A number of banks have now also introduced a so-called debt ratio ceiling. This means that there is a ceiling on how large the mortgage loan may be based on your household’s annual income. It is common for you to borrow at most about 4-6 times the gross income for the household.

For example, if you earn USD 350,000 a year and your partner 300,000, your household has a gross income of USD 650,000 per year. The debt ratio ceiling then gives you the most you can borrow USD 2,600,000–3,900,000 depending on the debt ratio that the bank you want to borrow from uses.

Disposable income

How much you can borrow based on your salary is not only determined by your income. Your expenses also play a big role. If you have ongoing expenses, parts of your income are already tied up. Banks take into account hundreds of factors, where capital deficits are one that is important. A high capital loss deficit simply means that you pay a lot of interest fees per year.

If you earn USD 30,000 after tax and have ongoing expenses such as car costs, other loans, food and so on USD 10,000 each month, then you have a disposable income on what is left – USD 20,000. In practice, this type of analysis is much more complex.

Benefits of comparing the banks

Benefits of comparing the banks

When you lend to a home, you should always count on loans, then compare the banks. You should also do this if you want to take a private loan, for example, a cash deposit. All banks specialize in different types of customers. It is therefore not possible to say that one bank is better than another when it comes to loans. Therefore, it is important to compare different loan offers to find which bank suits you best!

If you as a private individual go to several different banks to compare the terms, they each take credit information on you. This affects your credit rating and can impair your ability to get a really low-interest rate.

If you choose to compare with Good Credit, only one credit report is made. The service is completely free of charge and you do not commit to anything when you make a comparison. Instead, Good Credit gets paid directly by the bank or lender when we help them get a new satisfied customer.