The credit market is constantly changing. Not only credit terms such as interest rates, maximum terms, etc. change, but the products themselves are constantly evolving. In our article, we present two new financing products for SMEs offered by Fast Lend and which meet specific needs.
Evolution of SME loans
The traditional and most frequently used form of business credit is “classic” SME credit. It is a one-time loan, the sum of which must be repaid within an agreed time in the form of monthly payments, which include amortization and payment of interest. Companies can obtain such a loan from banks or apply to specialized intermediaries.
In terms of developments, peer-to-peer has experienced strong growth in recent years due to the slow decline in the domination of banks in the credit market. If you are interested in a simple operating loan with or without a bank, Fast Lend offers “classic” SME Credit solutions.
New types of credit: dynamic credit and revolving credit
Due to constant innovation in the credit market, new solutions have emerged. These products differ from conventional loans in the way they work while maintaining the same base, namely the possibility for a business to obtain cash.
Dynamic credit is a special type of credit that can be seen as an alternative to factoring / factoring. The company benefits from a flexible credit limit used to finance its needs. Dynamic credit thus makes it possible to overcome the need to wait for payment from its customers. This service is a specialized financial product which differs from conventional credit in several respects:
- The amount awarded depends directly on the annual turnover and expected revenues
- Receivables from customers serves as collateral for amounts received
Dynamic credit differs from other types of credit in that it is a product designed to accelerate cash flow and improve equity. Cash is not paid immediately, but the business receives a portion of the loan each time it makes a sale. This has several advantages:
- This service allows you to obtain cash without waiting on the payment of your customers
- Real alternative to factoring for example
- Improved cash flow
Revolving credit (or revolving) is a type of credit that works similar to a mortgage: the borrower receives a certain amount paid directly, of which he pays only the interest. There is therefore no amortization during the contract. At the end of the contract, the amount borrowed can be repaid in full, or the contract renewed (we therefore speak of revolving credit). In the second case, the company continues to benefit from the borrowed amount and pays interest on it. It is also possible to convert the product into a conventional loan after the end of the contract.
- Monthly fees are particularly low as only interest is charged
- The sum can be borrowed very short term (at least 6 months)
- The repayment can be broken down by conversion into an SME loan
These new types of credit have only recently appeared on the Swiss market – ask a specialist like Fast Lend, who offers revolving credit as well as specialized advice for companies looking for liquidity.
Call in a specialist
When an innovative product enters the market, borrowers often do not yet know the details and specifics. It is therefore all the most important to obtain information from a competent advisor. Fast Lend is one of these experts on the financial market which, in addition to the well-known installment loans, also offers new types of credit such as dynamic credit or revolving credit.