Starting a business is not easy at all. In addition to a good idea and quality staff, there should be good timing for marketing and money. There is nothing going on without money, and it is not easy to reach, especially if you have no experience behind you. But there are also various opportunities that allow a business owner to invest in their own business. The company can borrow, and the money can be borrowed by the owner from their own funds, or they can borrow the desired amount from another company.
Borrowings are smaller amounts that are lent to clients for a short repayment period. The biggest advantage of lending is that loans can be made by legal and natural persons. Companies can lend to workers as well as vice versa. Individuals can lend to legal entities, and most often it is a business owner’s loan to their company.
What to know if the owner is lending to his or her own business
If the owner lends money to his or her own business, it must first be regulated through legal means. The owner as a natural person and only the company as a legal party sign a contract that will regulate the rights and obligations related to the repayment of the loan.
After that, it is enough for the business owner to transfer the loan through online banking or by paying cash at the bank. It is only important that when making a payment, it is a loan, otherwise the owner could pay the tax, especially if it was a business instead of a business.
It should also be observed whether the contract regulates the interest rate at which the loan is to be lent. Basically, the owner usually does not set the interest rate because the individual, or the owner, pays tax on the borrowed amount.
What to know if a business lends to a business owner
Just like an individual, a company can lend to a business owner, but this is not considered a private loan of money. It is basically not possible to borrow without an interest rate, with the interest rate not lower than three percent per annum. This is the minimum interest rate that a company / legal entity is subject to when lending to a business owner who is a natural person. If it is lower, it is considered to be a profit or a receipt that the owner would not otherwise have received, and tax should be paid. Therefore, something like this should be taken into account when lending to a business owner.
If a company lends directly to another company, there is basically no obstacle. Money can be borrowed and there is no minimum interest rate to satisfy.
Loans to business owners from banks and credit institutions
In addition to these types of lending, banks and other credit institutions licensed by the Croatian National Bank also provide loans to the homeowner. Before borrowing money, a contract is signed in which all terms of the loan, from the sum, the repayment plan and the interest rate, are clearly stated.
Banks and credit institutions have special types of loans, loans and loans that are intended for businesses and tradesmen. They provide more favorable interest rates on loans to business owners and artisans seeking a place in the market, as well as custom repayment periods.
In order to revive the market, the banks are working with the Croatian Chamber of Trades and Crafts and the Croatian Bank for Reconstruction and Development. This type of cooperation enables more favorable short-term borrowings and loans intended for financing working capital and long-term loans intended for financing permanent working capital. Interest rates are thus reduced on average from the standard offer, but it all depends on the type of loan, loan and loan the company is taking.