If you’re a small business owner that’s currently having success, you’re probably thinking about growing and to achieve that you’re in need of capital. In this article we’ll compare the two most popular options for Mexican enterprises: supplier financing and banking credits.
The first group includes enterprises such as Aspiria that offer online loans for business owners. The second is constituted by known financial groups for instance Santander and Bancomer.
According to the credit report for enterprises published by the Bank of Mexico, during the July September trimester of 2017, 76.5% of the surveyed companies (450+) have an open credit with a service supplier.
Around a 34.1% of surveyed organizations mentioned having used services of a bank. This numbers reflect the control these institutions have over the market, every entrepreneur should know its advantages and disadvantages.
In this article, we’ll compare the online business credits of enterprises such as Aspiria versus the services offered by the Commercial Banking. We’ll start with the requirements.
The Online Loans Are A Practical Option For The Mexican Entrepreneur
The report published by the Bank of Mexico also indicates that each time more complicated to have access to new banking credits. In fact, 45.4% of surveyed enterprises said the requirements to acquire a loan in Commercial Banking were less favorable in comparison with the last trimester.
But, which are the basic requirements to apply for a bank loan? Well, each bank has its own protocols, but most of them ask the candidate:
- Be between 25 and 65 years old.
- Proof of residency and be at least two years in the same address. However, there are some banking institutions that offer credits for enterprises with only a year of existence.
- The applicant must be there present during the application.
- Good score in the Special Credit Report.
- Basic documentation including the Constitutive Act and legal powers.
- Proof of income such as bank accounts, financial statements and tax returns.
Taking that into account these and several data, it is not strange that most Mexican enterprises prefer to use financial service suppliers rather than going to banks to obtain capital injections to their businesses.
Normally banks base themselves almost exclusively in the history of the Special Credit Reports of the company to authorize a loan. By the other hand, Aspiria uses a less severe model that protects the applicant and the company.
For Aspiria, the most important factors to consider providing a business loan is the cash flow of the organization and the growth potential.
As a result, if an organization can demonstrate having a positive cash flow for some time and Aspiria considers that a capital injection can increase its profitability, the loan will be provided not being so relevant the Special Credit Report Score or the Credit History. But, which are the requirements to obtain a loan with Aspiria?
- Proof of residence for home and company
- Bank statements (3 to 12 months)
- Accreditation of business activity
- Personal and business documentation, depending on each case
- Be older than 25
- Have a business at least 6 months in operation
- Have a bank account
- Income at least $10 000 MXN
Any business that fulfills the requirements can visit the Business Credit Calculator in the Aspiria web page. There, the user can make an approximate financial projection with the amount and time desired.
Aspiria loans go from $10 000 to $250 000 MXN within the Mexican territory. In Guadalajara, the amount can go until $1 million MXN.
The loan application with Aspiria is made through the official webpage, the financial service supplier will have a resolution within the next 2 or 3 work-days once they have the documentation complete. If the credit is approved, the money will be deposited in the desired bank account in the next 24h.
As for accessibility and practicability, the credits by Aspiria exceed by far the options presented by the banks. Allowing the company to become a much more attractive option for small businesses and entrepreneurs. Next, we’ll talk about resolution time.
Express Credits For Businesses Are Ideal To Benefit For Inversion Opportunities
In the next couple of years, the fast or express credits have become very popular in the Mexican territory. This can be due to the fact the process with the Commercial Bank is more severe and slow.
The report for perceptions about the access conditions and credit bank cost reveals that 46% of surveyed companies think that the resolution time for applications in banks is not very favorable.
As the broadly known proverb says, time is money. However, there are other important factors to consider before making a decision, that’s why we’ll talk about the interest rate and administrative costs.
Interest Rate & Associate Costs To The Credit Process
One of the most important things to consider when deciding on a business credit supplier is the interest rate. This is particularly true in Mexico, where the interest rate can vary between 98.9% and 12%, according to a report made by “El Financiero”.
It is advisable to study deeply costs and tariffs by financial service suppliers before signing a contract.
One of the reasons for which Aspiria has reported a continued growth is its low prices. The company has a fixed $200 MXN price to cover administrative costs and has one of the lowest interest rates in the market.
What is the Best for my Business: A Bank Credit or an Online Loan?
The answer to this question is “depends”. Although the Commercial Banking loans have become less accessible and slow, they still have some advantages over the online credits.
For example, more than 50% of the enterprises that use bank services said that the authorized amounts and payment time had been better in comparison to the last trimester. This is particularly true in enterprises with more than 100 employees.
However, based on the presented data, it is logical to conclude that the online loans offered by Aspiria are way faster and more accessible than those offered by most of its counterparts in the banking section.
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