In Mexico, almost 99% of the businesses that exist are considered SMEs (small and medium enterprises). But something interesting about these, is that in order to grow they need financing.

Commonly entrepreneurs and owners of SMEs finance their businesses with personal loans. This leads them to generate debts or enlarge those they already have.

The most common problems that exist when financing your projects with personal credit are the following:

Inadequate amount

The amount that a credit card can offer you is not enough for what your SME requires. Your business needs a bigger credit. For example, if you have a restaurant and you are about to expand, the costs range from permits to interior design and you would need to use more than one card.

High interests

Credit cards are designed for personal purchases that you can end up paying in a shorter term, but offer very high interest rates. That’s how you can get to over-indebtedness since you’ll be paying up to 50% more interest.

Your credit history and score are essential when requesting financing. This is information that occupies the institutions to be able to grant you a loan.

Terms

Online loans for SMEs are designed to help you strengthen your business. Through the way they analyze your information, offers are made that can benefit your projects. Payments are defined with your business’ billing and credit history.

And if you have a positive experience and your business is achieving more goals, you may be able to be creditor to better offers with larger amounts.

If you have financed your business with personal loans, today there is a possibility that you can transfer your debts to business loans.

At Konfío we have developed a product that concentrates all your debts into one, free your credit lines and improve your credit bureau. Financing for business is especially designed for them, resorting to the right credit.

Currently there are financing for businesses with many qualities that will benefit your business. Remember that you can use this financing for different things that allow you to progress and grow your business.

The following tips will help you to correctly use your financing for business:

Invests

 

Use financing primarily to invest. Try not to use the money only in expenses. Find a way for the money you invest to help your business grow. There are many ways to invest your credit money

Do not fall behind

 

Always keep a healthy financial image. It is very important that you pay on time so that you do not generate more expenses. Always pay on time and in this way you will get better credit opportunities in the future.

The right time

 

Identify the best time to request it, take your time to analyze the status of your business. The best time to request financing is when your company really needs it and it will serve as a tool to meet the objectives.

Do not become indebted

 

If you are in a period in which you have many expenses, the wisest decision is that you do not acquire a new debt. Always remember to measure your payment possibilities. It is not good that you accumulate expenses that in the end could bring you many financial problems.

Choose the right one

 

Find the loan that suits your business. Do not go for the first option you find. Always analyze in depth all the credit options for businesses and choose the one that covers the needs you have for your business.

These tips will help you use business financing in a better way. Make an informed decision and encourage yourself to use a credit for your business. Do not forget that in Konfío we offer you credits that adapt to the size of your business. We use technology so you can apply online, and thus support the growth of your business.

Before choosing credits for companies it is important that you be careful and choose calmly. Take your time, look for different options and make sure your company is in the best moment for financing. Below we share some tips that will help you make the best decision and avoid possible fraud.

To avoid fraud, the first thing you have to do is:

# 1 Compare different credit options for companies

Do not go for the first one you find without first checking other options. Remember that the most “attractive” offers are the ones that can be deceptive.

# 2 Check what they say about the financial institution in social networks

The image of the company must be reflected in its official site. As Konfío has a presence on Facebook, Twitter and Instagram. Take into account that social networks are updated and check that you have good opinions from other customers.

# 3 Make sure it’s regulated

Before applying for credits for companies, check their certifications and regulations. CONDUSEF, through the SIPRES portal, provides corporate and general information on financial institutions. This way you can ensure the veracity of the information presented by the institution. When searching, remember that the commercial name is not always with which they are registered before CONDUSEF.

# 4 Know the contact information

Check that the office of the institution is not clandestine. If the option you are interested in is online, check if the lender company has an address with offices.

The indicators that will tell you if credit is fraudulent

# 1 They do not check your credit history

The companies that dedicate to grant credits for companies necessarily are going to investigate your credit history. With this they will be able to corroborate that you are really going to be able to pay your credit. In Konfío we evaluate your credit bureau to offer you better conditions in your SME loan.

# 2 It charges you money before knowing if your credit will be granted

The moment you ask for money without even asking for your information, you can begin to suspect that something is not right. The lenders do not have to ask for an initial deposit without having approved your credit application

# 3 They do not ask for your business information

If they only ask for your name and give you an account number to make the deposits there, surely it is not a serious institution. To carry out the loan process the company needs some requirements to do everything legally.

We, for example, ask you for some information such as: official identification, proof of address and your RFC.

Take care of the credits for fraudulent companies, do not be fooled and take all the previous precautions to protect the money of your business. If you are looking for business loans remember that Konfío is a good online credit option.

If you are about to apply for a loan, there are certain recommendations that you must take into account in order to present yourself to any financial institution and obtain a yes. One of them and perhaps the main one is to improve your credit history, since it is one of the requirements that they evaluate to be able to know if you are a good candidate for financing or loan.

To give you a better idea on this topic, access to credit is now said to be limited by those who request it, according to a study we conducted on the importance of the credit bureau. And the truth is that this happens because the requirements that the institutions that grant loans, such as a bank or a financial institution, request are to analyze the viability that exists on the part of the client to be able to offer money.

Below we will explain in more depth how they evaluate your credit history and what information is important, as well as the benefits you can obtain if you can improve your credit history.

Why do they review the credit history?

A bank or institution dedicated to offering loans reviews the credit bureau to be able to know your credit history. But remember a bit that it is not bad to appear in the Bureau, because each and every one of us who have had a credit card, a department or a loan are there.

That is to say, at the moment in which we started to handle any type of credit the company “Credit Bureau” records all the information about them. From what institution you have lent, the amount, interest, term to the exact date and form in which you make the payments to settle.

That is why having a good credit history is important, because if a bank or finance company realizes that you know how to properly manage your finances and you are a constant and punctual, you will not hesitate to say yes. Since that shows that there is a high probability that you continue in that way and the risk you represent of not paying is lower for them.

What information about your credit history is important?

Of all the detailed information that shows your credit history, there are three important points that quickly give an indication of your financial behavior.

# 1 Credit Score

The credit score is a rating that is granted according to the management you give and that goes from 300 points to 850. 300 being the lowest and 850 the highest. For example, if you are at 580 points which means “regular” you increase the chances of obtaining a yes.

# 2 Due balances

In the same way you can know which balances are past due and which ones are still pending. Here it is important that you know that they also show the date in which each payment is due and how many days you have been waiting to pay. For example, if you took 3 days from your cut-off date, there is a section that shows that or also if it is already a total debt due.

# 3 Amount of credits with which you account

Another important indication that shows the history is the amount of credits with which you account. Well, if for the bank or institution it represents a high amount, they will think twice, regardless of whether you are punctual, because there is a risk. For this case, check what credit cards you could stop using or even cancel.

Benefits of improving your credit history

Obtain credits or financing

By improving your credit history, being punctual, paying off your outstanding balances and having control over your finances, you could have obtained a loan or financing without major problems. Although another advice is that you are very aware of your ability to pay, limiting yourself to using what you can actually pay.

Be a creditor of better offers regarding credit

Another benefit that gives you a good track record is getting better credit offers. That is, when you realize that you are a good candidate, you decide to increase the amount offered and lower the interest rate or adjust the term to a more convenient one for you.

Now that you know why it is important to improve your credit history before applying for a loan, you can start with small actions that will make a difference. For example, create a payment plan in which you have control of the due dates and the amount you pay.