Bank loans to innovate
February 21, 2019
Many young Spaniards are dedicated to innovation within the most diverse fields of production but have great difficulties in financing to develop the project until it becomes commercialized and therefore becomes profitable, hence many must go to the most diverse methods to obtain monetary liquidity, from requesting money from relatives to borrowing online from a company that grants online microcredits urgently.
While asking for money from relatives implies putting the relatives’ economies at risk (and giving all kinds of explanations) it is one of the most common and advantageous ways for the entrepreneur because if, instead, he requested the money from a lender would have to face the return of the principal in a short space of time and what is worse would have to pay some interests, previously agreed, very high, around 20%.
There are several personal loan companies
Such as Cofidis with very favorable customer opinions and many clients, which is a guarantee for the young self-employed person in case of economic hardship, although he must request these miniprestamos with a lot of responsibility, being aware You will have to return them together with the interest on the expected date, so you should not request it lightly, but making a preliminary and detailed study of whether money will be available at that time to meet the debt.
In view of the development of an innovative project, it is perhaps better to look for another type of financing, with a relatively long repayment term, that is, instead of making money with the microcredit, make use of the traditional loans that although much more documentation and meet many more requirements to be granted the interest rate will be much lower and will have time to patent and start the new technology project.
Another variant that can be used by the entrepreneur or freelance who develops new technologies is to look for sponsors who will finance research and development in exchange for part of the future benefits.
Although in theory seeking external financing for the development of research is a viable alternative in practice it is very difficult to get financiers to believe in your project, and this happens both for private companies and public entities.
In Spain, looking for funding for new projects (which you never know if they will really come to fruition or not) is practically impossible but the same does not happen in other European countries where the mentality of investing in research and development is much more implemented, but not only at a particular but also institutional.
If before the economic crisis there were possibilities that some Bank or Savings Bank could get to lend you money for a research project in new technologies (that only exists on paper) today it is practically unthinkable that we do not even consider to grant you a credit.
The new loan model is focused on the domestic economy and relatively small amounts of money