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How can a micro credit grow your business?

December 16, 2020

It is becoming increasingly difficult to get a loan from a bank for the start or growth of a business. That is why more and more entrepreneurs are opting for microcredit. This is a business loan of up to € 50,000 for (starting) SME entrepreneurs. Money is needed at every stage of the business. Certainly when large expenses have to be made, this cannot always be paid out of pocket. In practice, therefore, smaller companies in particular regularly opt for microcredit.

Who is the micro credit for?

The micro credit is a business loan of a maximum of € 50,000. This relatively small loan has been specially created for starting and existing entrepreneurs in the SME segment. As an entrepreneur you can decide for yourself what you use the money for. For example, it can be used for hiring personnel, buying machines or paying supplier bills. Micro credits are ideal for growing the business. Small companies in particular make good use of this, but self-employed people can also apply for this loan. As soon as you meet the conditions of the micro credit, you can apply for this business loan:

  • Your business credit requirement is € 50,000 or less
  • You are 18 or older
  • You are a starting or existing entrepreneur
  • You take over a company or work as a self-employed person
  • You are established and do business in the Netherlands
  • You can show a good business plan
  • You have entrepreneurial skills

Is your credit requirement more than € 50,000? Then you can consider applying for an SME loan . With this business financing you borrow an amount between € 50,000 and € 250,000.

What is microfinance?

Microfinance is not the same as microfinance. The micro credit is a loan of up to € 50,000 with a term of 1 to 10 years. Do you combine this credit with coaching? Then we speak of microfinance. The possibility of combining the loan with personal guidance is what makes microfinance so special. Your coach will help you where necessary by providing advice on, for example, permits, customer acquisition or cost savings. Microfinance is especially ideal for starting entrepreneurs. Studies have shown that a company that has applied for a micro-credit has a twice as high survival rate. One explanation for this is that entrepreneurs who use a microcredit or microfinance - to start or grow their business - pay more attention to the expenses of their business. Precisely because of a relatively small loan amount, every dime is turned over. This is in contrast to large loans with which unnecessary expenses are incurred.

What is the KKC scheme?

The corona crisis has hit many SME entrepreneurs hard financially. Do you need credit to cover the shortages? Then you as an entrepreneur can use the Small Credit Corona (KKC) guarantee scheme . This bridging loan is a micro-credit for small companies with a financing requirement between € 10,000 and € 50,000. The term of the Corona bridging loan is a maximum of 5 years, on which a maximum of 4% interest is charged. The government guarantees this specific microcredit. The KKC scheme is specifically aimed at small businesses.

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