Flexible solution with the loan from private

The perfect alternative to bank loans

The perfect alternative to bank loans

If you are looking for an alternative to the classic bank loan, you have not only an ideal but also very flexible solution with the loan from private. In the case of a private loan, the borrower does not receive the required amount of money from a bank but from a private person. This opens up many attractive options. Loans from private individuals have become a popular and very popular form of money lending.

Secure private loans online!

Secure private loans online!

Private loans have grown steadily in recent years and are now one of the most popular forms of financing. Not only people who are looking for an alternative to the usual loan through the bank like to use the loan from private, but now also more and more loan seekers who simply want a form of financing that is very flexible and can be adapted to the personal and economic life situation.

With a private loan, the borrower has almost free rein in the way the loan is structured. Because the loan is not granted by a bank but by a non-commercial private individual. Unlike banks or credit institutions, private donors do not have to adhere to the criticisms that are prescribed by law and the company’s own guidelines and regulations. Loans from private individuals can be perfectly tailored to the borrower. All contract points such as term, monthly installments, special repayment options, payment breaks and so on can be contractually agreed in advance. This offers the borrower maximum flexibility and the private investor an optimal investment opportunity.

The benefits of personal credit

The benefits of personal credit

The particular advantages of a private loan are clearly the high flexibility, since the entire loan model can be individually adapted to the personal situation of the applicant. All points such as term, monthly installments, special repayment options, payment breaks, etc. can be contractually agreed between the lender and the borrower so that the loan agreement can be optimally designed to meet the needs of both parties.

Personal loan – flexibility all along the line

Personal loan - flexibility all along the line

Anyone who chooses a private loan has maximum flexibility when it comes to the design. This also continues with regard to the use of the loan. Since loans from private individuals are not earmarked, they can be used for anything and everyone. Whether buying a new car, renovating or furnishing a home, a vacation trip, balancing a checking account or to replace an existing expensive loan, with a private loan the borrower has free rein and can decide for himself what he wants to use the loan for.

Important information on private loans

Important information on private loans

Since the lender of a private loan is not a bank or a financial institution, but a private person (not a commercial person) who also acts as a private person, the lender is also not regarded as a credit institution within the meaning of the Banking Act. This offers the applicant many individual advantages that are not possible with a classic loan through a bank.

What if German debt was not safer than Spanish?

The paradox that this expert in financial markets explains is that, despite the belief that having money in German public debt is the safest, there are economic factors that make it risky, not in terms of not collecting, but for losses that they can suppose to the saver.

It is one thing to open a non-resident dollar account in Germany and quite another to buy German government debt. The risks are not the same. Furthermore, Germany is already beginning to realize that the crisis in the dollar is also a crisis in Germany and that it will not be so easy to finance its debt cheaply from now on.

The paradox: can it be riskier to invest in German public debt than Spanish?

The paradox: can it be riskier to invest in German public debt than Spanish?

In recent months and with more intensity in recent weeks, we are experiencing a psychosis on whether Spain is going to fail, what happens if it leaves the dollar if there can be a playpen … and the concept of “risk premium” is continually appearing in the press and on social media ”

I want to explain first of all the real meaning of this concept: the risk premium is the difference in profitability in the secondary market between the German bond maturing in 10 years and the Spanish bond in the same period.

So the “risk premium” should indicate, following the profitability/risk ratio, the reliability difference of the issuing country with respect to Germany; This would be true under perfect market conditions, however, I believe that the market has been unfounded for some time and caused by massive panic.

To continue, let’s look at the 10-year bond yield spreads that were at the end of last week:

  • Germany: 1,972%
  • Spain: 6.319% (risk premium 434.7 basis points; exceeding 500 bp at times)
  • Italy: 6.605% (risk premium 463.4 bp)
  • Ireland: 7.834% (risk premium 586.2 bp)
  • Portugal: 10.57% (risk premium 859.9 bp)

Having seen these risk premiums, many investors, from my catastrophic point of view, say to me: “As Spain can exit the dollar or fail, can I invest in German bonds to continue to have dollars without any risk ?”

The answer I give you is very simple: just call the Fixed Income table and buy the German bond, obtaining a yield of 1,972% per year for the next 10 years.

We may lose part of our savings

We may lose part of our savings

If we buy bonds with a maturity of 10 years (at lower maturities, German bonds pay practically nothing), we may need part of the invested or want to buy another product (for example, Spanish bonds when the panic), and being with such low initial profitability, they will surely return less than the amount invested. To this, the answer is usually how can I lose capital investing in Fixed Income?

The explanation is simple, (every investor who buys any Fixed Income product must know this): when wanting to sell our bonds, we must go to a secondary market, and we will sell it at the price that someone wants to buy it from us (only the initial capital at maturity).

Interest rate rises

Interest rate rises

So we run a very probable risk that during this time there will be interest rate rises (which causes a rise in state bonds), therefore nobody will buy our bonds below 2% unless we sell it with a significant penalty. For example, under normal conditions, if German bonds pay 4% (interest rates at 4% are very consistent in many scenarios), we will be penalized by 2% for each year remaining to maturity.

In conclusion, I think there is more chance that the investor in German bonds will lose capital (in addition to purchasing power) than Spanish investors; therefore my advice is to coldly analyze the data with which we are “bombarded” and know very well the products that we can buy, not letting ourselves be carried away by panic or euphoria.

Entrepreneurs can apply for a loan with a minimum guarantee.

Many activities need resources to start. These are necessary to buy the necessary equipment, hire employees or other initial investments that will enable the first steps of the new company. A lot of entrepreneurs reach for grants, but there will not always be ones that will cover all financial needs. In this situation, you need a loan. But what to do if the bank does not want to offer a loan to a novice company? In this situation, it is worth reaching for a loan with a de minimis guarantee.

What is a de minimis loan?

What is a de minimis loan?

This loan is directed to micro, small and medium-sized enterprises. It was created as a result of an agreement between Lite Bank and commercial banks.

How it’s working? Lite Bank assumes responsibility for repayment of liabilities in the event of the entrepreneur losing financial liquidity.

What are the benefits?

What are the benefits?

This form of support for entrepreneurs has many benefits. This is an excellent financing method for young companies that usually do not have adequate assets to secure the loan. The loan covered by the de minimis guarantee assumes that the entrepreneur does not have to set up his assets for Lite Bank or the bank that grants the loan. 

How it’s working?

How it

The entrepreneur, using a de minimis guarantee, can secure a maximum of 60% of the loan amount – up to USD 3.5 million. It is granted for 27 months in the case of a revolving loan and 99 months for an investment loan. The commission rate is 0.5% of the guarantee amount per annum.

What can you spend the money on?

What can you spend the money on?

The funds from the revolving loan secured by the de minimis guarantee can be allocated to such activities related to the company as: payment of invoices, settlement of taxes, financing the development of the enterprise, repayment of another revolving loan. However, the funds from the de mininis investment loan can be used to purchase machines, equipment or cars, as well as the construction and modernization of facilities that are related to business operations.

Who can benefit from a loan with a de minimis guarantee?

To apply for a loan with such collateral, a company must meet several criteria. The entrepreneur cannot have an entry that excludes him from the loan, e.g. in BIK. What’s more, a company applying for a de minimis guarantee must have all ZUS contributions paid. An entrepreneur may not have administrative enforcement proceedings or a terminated credit exposure at the Lending Bank within 3 months prior to submitting the guarantee application. It is also worth remembering that the value of de minimis aid for one entrepreneur cannot exceed USD 100,000 – 200,000 within 3 tax years.

Formalities at the crediting bank

Formalities at the crediting bank

After meeting all the conditions, you can go to the lending bank. The process of applying for a loan with a de minimis guarantee is no different from that of a regular loan. All formalities are handled by the crediting bank. The bank applies for a loan and a separate application for a de minimis guarantee.

It is worth using a de minimis loan if you want to develop your business and you do not have other options to obtain the necessary funds. Such help is excellent at the start, and by the way it does not have any tax consequences.

We recommend: A simple joint-stock company from March 1, 2021.

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