- What is meant by financial credit?
- Providers of financial credits
- Some rules and principles to consider when financing your company with credit
- Alternative credits or specific credits
What is meant by financial credit?
Credit, and particularly financial credit, is one of the main sources of funding for a company, together with capital and self-financing.
Financial credits are often simply called credits or financing (while the concept of financing is clearly broader).
Among financial credits, there are credits intended for the long-term financing of the company:
- Mandatory loan (not subordinated)
- Hybrid credit (often associated with equity)
- Subordinated loan
- Classic loan (investment credit, instalment operation, etc.)
- Leasing or finance-lease debt
And in the short-term:
- Fixed-term advances (straight loans)
The common characteristics of these credits are that they lead to the payment of interest and have a repayment obligation (with some nuances for leasing and factoring).
Providers of financial credits
Financial credits are often provided by specialist companies (or via the latter), members of the Belgian Financial Sector Federation (Febelfin)and subject to the FSMA (formerly CBFA), the regulation authority.
We distinguish the following from specialist providers of financial credits:
- Credit establishments or banks, members of the Belgian Bankers' and Stockbroking Firms' Association (ABB)
- Leasing companies, members of the Belgian Leasing Association (ABL)
- Factoring companies, members of the Belgian Association of Factoring Companies (APBF)
Some of these credits may also be granted by public institutions, such as:
- the Brussels Regional Investment Company (SRIB-GIMB)
Some rules and principles to consider when financing your company with credit
It is important to:
- understand certain financial notions relating to the different sources of financing of a company, and how this translates into a liability on the balance sheet
- identify types of financing needs
- assess the level of this financing need
- choose and weight the sources and forms of financing
- evaluate the type and level of guarantee required
- optimise access to sources of financing
Alternative credits or specific credits
Some public or private institutions offer alternative and/or specific financing, whether this be in social, sustainable development or other terms. This often corresponds to micro-credit.
In terms of the Brussels authorities, we can mention Brusoc, which offers financing adapted to social economy projects as well as local economy projects. Brupart also offers the "Boost-me" loan for the unemployed, receiving benefits and companies which are less than 4 years old.
The private market also includes several stakeholders in the alternative financing sector, such as Crédal, which offers credits to companies active in the social economy.
We can also mention Triodos, which finances companies offering added value in social, ecological or cultural terms.
Finally, some crowdfunding platforms are specifically dedicated to projects of this type.