Finance, Loans
Credit for small business development. Problems in obtaining
Weak development of entrepreneurial activity is a consequence not only of administration and regulatory policy of this sphere, but also of problematic access to borrowed funds. The fact is that even before the crisis, a loan for the development of small
Key problems of lending
The main problem of this attitude is the non-transparent structure of the enterprise. The primitive level of financial literacy of an entrepreneur is a useless, and often risky, factor for banks. Even a stable financial company with transparent activities does not always manage to take out a loan for the development of small businesses. What can we say about the lack of skill in the entrepreneur to compile an elementary financial and accounting report for the bank. The next problem is a small percentage of equity in the statutory fund of the enterprise. It is very difficult to get a loan for the development of small businesses, if the balance of the company is only 5 - 15% of its own finances, and the rest - borrowed funds. Any mistake in running a business can turn into bankruptcy. For a stable
How to get
Before issuing a loan for the development of small business, Sberbank, VTB or other credit institution will require mandatory guarantees for its return. Repayment of a debt is made at the expense of the received profit of the enterprise, without withdrawing money from circulation. Hence, the income received must be significantly higher than the interest rate, so to obtain a loan you need
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