Credit, especially business credit, is one of the engines of the economy. Regardless of the size of the company, in order to carry out its investments, strengthen working capital or simply strengthen the liquidity of its business or refinance, loans are always an option to consider.
(Main reasons of the Banco de la República to raise the rate to 11%).
Right now, the portfolio for companies is growing at the highest rate since the covid-19 pandemic began. According to information from the Financial Superintendence of Colombia, the commercial portfolio grew by 11% nominal in May, an increase not seen since April 2020, and the microcredit portfolio grew by 14%an outstanding figure if one takes into account that before January of this year this portfolio did not have double-digit growth.
It is noteworthy that so far businessmen have shown good behavior in the payment of their obligations, which is evidenced by quality indicators of the portfolio due to maturity below pre-pandemic levels. However, this good panorama of business credit has an orange flag, interest rates, which, being generally short-term and variable, are the ones that have been most affected by the increase in the intervention rate of the Bank of the Republic.
Nidia García, director of Financial Education and Customer Experience at Asobancaria, recommends, before taking a loan, to be clear about the destination of the requested resources, the amount required and the term to acquire it. These actions are key because the payment of a credit implies an additional burden for your company’s liquidity, so all its conditions must be in accordance with the needs and possibilities of your business. Please note that if your business has not previously applied for credit, doing it for the first time will help you build a credit history, which will help you to access new credits in the future.
(These are the risks of the Colombian economy, according to Bank of America).
If you are already sure about the need to take the credit, the next thing is to identify which banking entities offer the product or service that your company requires, the interest rates and the requirements and documents demanded by the selected entity. Remember that before taking out a loan, you should always compare the conditions between the different options, so you can be sure to choose the best one for your business.
For micro and small businesses without credit experience and for new businesses, the ideal entry point may be microcredit, a financing modality that is characterized by lending a maximum of 125 minimum wages to promote productive projects of SMEs.
The commercial portfolio modality has specialized lines to satisfy the different needs of your company. Revolving credits are designed to cover immediate contingencies; treasury credits cover very short-term needs; and free investment credits are designed for short-term liquidity financial needs. There is also the ordinary portfolio, designed to meet medium and long-term financial needs for capitalization, investment in machinery or infrastructure.
Likewise, entrepreneurs may consider the option of medium- or long-term mortgage loans for the acquisition of real estate. In addition to commercial credits and microcredits, there are other options that you can use with your entity such as factoring, a line of credit so that the supplier can discount your invoice; leasing, a financial contract, with which a bank delivers an asset to the company for its use in exchange for a periodic canon, said asset can be transferred to the company through a purchase option, at the end of the agreed term. Don’t forget that checking account overdrafts and business credit cards are also a business financing option.
Depending on the sector of your company, you will also be able to find financing options such as agro-industrial and agricultural loans, loans to exporters, which are in foreign currency, or green financing lines, aimed at financing projects that promote the sustainable use of resources. renewable natural resources, the protection of the environment and the competitiveness of the productive sectors of the country.
Finally, keep in mind that in general, to grant a loan, banks mainly consider the ability to pay. This is calculated through the company’s cash flow. In the case of a microenterprise that has never accessed a loan, this is the most important requirement and must sometimes be supplemented with guarantees when there may be some uncertainty about the cash flow. For the others, the trajectory of the company, its credit history, the endorsement or guarantee that it is going to present are important elements for its evaluation.
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