Tuesday, 11 August, 2020

Loans for young entrepreneurs

Young people are a particular user for banks and financial companies as they are not always able to present solid economic guarantees for the request for a loan.

Hence the idea of ​​many credit institutions to reach out to young entrepreneurs and students who need capital to be able to satisfy small and large needs: the purchase of a car or a motorcycle, the maintenance of studies and the business start-up Compared to classic personal loans, which include specific requirements and a more stringent valuation system such as the presence of a stable income, funding for young people is a much more flexible credit solution. This of course does not mean that it is not necessary to present other alternative forms of guarantee. Among these there is for example that of the surety that provides for the presence of a guarantor, that is, a person who is ready to come into play and to take over the principal debtor in the payment of loan installments if the applicant is no longer able. The credit institutions cannot, in fact, risk losing the loaned capital.

Since access to finance for young people is easier than other types of credit, the amount that can be financed is more limited. For the most part the amount payable is between 500 and 15 thousand euros.

If you are a young entrepreneur and you need more liquidity to carry out your project, we advise you to continue reading this guide. Only having a clear knowledge of the various proposals put in place, you will be able to make the right choice and fit your needs.

Non-repayable loans

Loans for young people are credit solutions designed for students and workers aged between 18 and 35 who wish to realize their own dream but do not have enough capital to do so. One of the most beaten roads in this case is that of non -repayable loans .

The recipients of non-repayable loans are young entrepreneurs and start-ups. This funding is provided by the Regions, the State and the European Union.

We are talking about loans that do not provide for the repayment of the loan amount, nor for the interest applied. These loans are designed for young people between the ages of 18 and 36 who wish to set up a new company.

Honor loans for young entrepreneurs

Honor loans have been devised both for those who study and have to pay for master’s degrees, purchase of books and school materials or post-graduate courses, and for those who want to start a small business.

Honor loans are intended for certain types of businesses, such as: franchising, micro-enterprise and self-employment.

In these cases, a portion of the capital is disbursed, while the remainder in the form of a loan to be repaid to the bank at a reduced rate .

The Youth Guarantee Fund

In recent years, many young people are working to create their own business and try to overcome all the economic difficulties of the moment. When working on the creation of a company, it is almost always necessary to request a loan to help the young person start his project. This is why we rely on non-repayable loans and the Youth Guarantee Fund .

Non-repayable loans for young entrepreneurs are not characterized by time constraints. However, the projects will have to cover certain activities so that they can be financed. Here are: production of agricultural, craft or industrial goods; provision of business services. These loans can go up to 50% without repayments. These loans can then be added with a loan or a loan that corresponds to 40% of the investments to be repaid in 10 years. The situation changes when it comes to Youth Guarantee. We are referring to measures designed at European level to encourage the integration of young people into the working world. Let’s explore the question together.

The Youth Guarantee Fund is dedicated to young people between the ages of 18 and 29. The idea is to be able to help the young entrepreneur from the start-up phase to the realization of the entrepreneur project.

Economic benefits are envisaged as well as a training period that will support the young entrepreneur during the entire development phase of the company. The loans, at zero interest, provide for a payable amount between € 5,000 and € 50,000. No personal guarantees are required to access the credit. Furthermore, the amortization plan has a maximum duration of 7 years.

Loan application and documentation

Loan application and documentation

If we are young entrepreneurs and we intend to apply for a loan from a bank or a finance company, we must be aware that the request will not be so different from the one presented for a traditional loan application. Our first suggestion is to take a good look around so that we can arrive at a comparison between all the best credit solutions on the market. Only with a comparison and a detailed analysis of the various proposals can we arrive at the choice of the best solution for ourselves.

Once you have chosen the solutions that most seem to respond to our needs, all that remains is to make an appointment at the bank where you intend to turn on the financing in order to interface with the competent staff. If, on the other hand, the idea is to take out an online loan , both a quote and a request can be made from the comfort of home.

The banks that work via the web offer convenient interest rates to their customers as there are no expenses related to the management of physical offices, nor costs related to banking intermediaries.

The loan agreement can also be signed with a digital signature

The loan agreement can also be signed with a digital signature

Then all that remains is to wait for our request to be examined and approved in order to obtain the requested sum. The credit institution will also ask us to send certain documents that we will attach to our request for funding.

So far we have seen then how to present the request to a credit institution for a classic youth loan but the procedure for non-repayable loans granted by regional, state and European institutions is completely different. The young entrepreneurs in these cases will have to follow another process. The first step involves filling out an application form that can be downloaded via the web on the portals of the various Chambers of Commerce. This document must be filled in carefully and then sent by registered letter with return receipt to the following address.

There is also the alternative way to send the form to one of the regional offices of Lupon Italia . To the request of financing of loans with lost fund it is necessary to add in duplicate other documents, like:

  • the business project and a copy of the deed of incorporation of the latter;
  • the certificate of validity which is nothing other than the document which presents all the information relating to the company from the date of its first construction;
  • a document that certifies that the company headquarters is located in the territories of application of the law;
  • a certificate that proves that the new company is made up of members who are between 18 and 35 years old.

At this point, all that remains is to send the loan request and wait for Lupon Italia’s reply, which will arrive after about 6 months. If our application has been accepted, we will be invited to attend a meeting in Rome: on this occasion we will have to discuss the project in order to obtain a non-repayable loan.

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