In Belgium, most companies are SMEs, that is to say Small and Medium Enterprises. When they suffer from cash flow difficulties, it is not uncommon for a request to be granted credit, over a short and specific period, to compensate for the temporary lack of liquidity. Unfortunately, many banks and brokers refuse to take out such a loan.
Focus on this subject.
Can an SME take out a loan?
An SME has the legal right to obtain a loan. Nothing prevents him from taking the necessary steps. However, few banking or credit organizations agree to grant a loan to this type of company. The financial situation of the SME is often in question. Indeed, the variation in the results of commercial activity as well as the instability of the firm’s income prevent the companies allocating the loans from having an overall idea of the state of the SME’s work.
What are the difficulties specific to SMEs?
Very often, the activity of an SME works wonderfully. On the other hand, it is not uncommon for it to temporarily lack liquidity. The one month deadline is therefore exceeded for payment of invoices and sometimes extends up to three months. This phenomenon then leads to a series of difficulties. Thus, the company finds itself obliged to make a loan request in order to remedy the various problems encountered.
How to resolve these difficulties?
Knowing that it is impossible to take out a loan as a legal entity (that is to say, as a company), another solution is then possible: request the allocation of the loan as a natural person. From then on, the loan is made by the managers or administrators of the company. However, in the majority of cases these are not employees but shareholders and also self-employed people. Consequently, some difficulties will hamper the allocation of credit.
What about credit for the self-employed?
Just like for an SME, an independent person is legally authorized to obtain a loan. However, taking out a loan is complicated. Indeed, the instability of their income as well as the variation in their financial situation cause numerous difficulties for this person such as the non-visibility of their work status by the credit broker. In addition, the deadline for payment of invoices also varies between one and three months.
At CPE, it is however possible to take out a loan as an independent person because our staff includes a specialist in this field. However, only mortgage loans are granted to the self-employed thanks to the guarantee provided by the mortgage. To do this, the self-employed person is obliged to be the owner of property free of any charge or to be a co-debtor with a person owning this type of property.
