Borrowing by a young entrepreneur must be differentiated between private and business. Differentiation is important because different companies offer credit for young entrepreneurs as the case may be. The tax consideration of operating lending rates requires a clear distinction from private loans. As a young entrepreneur predominantly company founders are called in an age of up to thirty years. See http://labeurettenue.com for details
The Intrasavings bank (Reconstruction Loan Corporation) counts the promotion of business start-ups as one of its tasks and awards a favorable loan for young entrepreneurs, whereby the concrete credit transaction takes place via a commercial bank to be selected by the young entrepreneur. A particular advantage of Intrasavings bank’s development loans is that the repayment only takes place after a start-up period, so that the young entrepreneur buys income before the beginning of the repayment. Other cheap credit providers for young entrepreneurs are local Volksbanks and savings banks.
In many cases, the relevant institutions also lend to young entrepreneurs with an initial repayment pause, especially since their statutes expressly provide for the promotion of the local economy. The corresponding loans do not always have to be applied for at the beginning of the self-employment, but can also be used to finance later necessary business expansions. The third option for borrowing company loans to start up a business is the use of a deficiency guarantee by the individual states.
The exact claims on the young entrepreneur vary from one country to another, in each case they facilitate easier lending by independent commercial banks. The examination of the creditworthiness is carried out on a company-initiated loan for young entrepreneurs mainly based on the business plan and other data on the planned investment. The private creditworthiness of the young entrepreneur supplements the information resulting from the company documents.
As direct banks and some retail outlets only lend to permanent employees, only a few banks are available for lending to young entrepreneurs. As a rule, large private banks as well as regional Volksbanks and savings banks issue a private loan for a young entrepreneur.
Since the actual income development is not clearly predictable due to the start-up shortly before lending, banks often require additional collateral on higher loan amounts. This includes the placement of a guarantor with a good credit rating as well as the pledging of claims from an existing life insurance or private pension insurance.
Websites for credit intermediation between private individuals partly accept young entrepreneurs as borrowers, especially as they actually act as private individuals when applying for privately arranged loans. Thus, with a good description of the project to be financed, a loan for start-ups can be obtained on the relevant pages.
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