A Loan for Business – Complication or a Good Springboard?

Starting a new business is always an exciting time. A company’s success depends on dozens of different factors, and even a carefully considered business plan does not guarantee success. However, business is not Russian roulette, where the outcome cannot be predicted. Effective risk-reduction strategies help overcome the difficulties of the first year and move the company on to its next stage of development. Read this article to find out which industries are worth starting a business in Latvia and how a loan can become an entrepreneur’s ally!

TOP 5 Business Industries with the Highest Potential

For several years, Latvia has held the honourable 19th place in the ranking of the most business-friendly countries, competing with 190 economies worldwide. This means that business development in Latvia can be successful in many industries, but the highest development potential is currently observed in:

• mobile applications. People are increasingly using smartphones not only as communication devices and want to use applications that motivate, inform and offer useful everyday advice;

• computer games and virtual reality. The development of IT is blurring the boundary between games and reality, and technologies that were previously used only for hobbies are now entering the fields of medicine, sport and the military;

• forestry. Wood-processing and forestry companies dominate many regions of Latvia and provide employment for approximately 80,000 people. Forest management is also a promising industry because environmentally friendly business models, which help preserve Latvia’s natural wealth, are becoming increasingly important;

• green technologies. Sustainable development is one of the main principles of the European Union, and businesses in this industry may receive financial support from EU structural funds;

• food delivery. Ordering prepared meals for delivery to homes or workplaces is becoming increasingly popular. A food delivery business will benefit from high-quality mobile applications and a reliable courier service.

Starting a company in an industry with high development potential is only the first step on the road to success. The most active business sectors also have the fiercest competition, so newly established companies find it difficult to outperform industry giants and strengthen their position. Read on to find out what problems an entrepreneur may face!

Fear of Growth – Complication No. 1

People often say that the first year in business is the most difficult, but even experienced entrepreneurs face challenges every day. Many newcomers to business believe that the most important thing is to achieve stability, while growth and conquering new markets can be postponed until later. An unwillingness to promote company growth is one of the biggest complications for a new business.

Fear of company growth is closely linked to fear of risks and financial failure. Not everyone likes challenges, but in the business environment, competition determines everything – unless a company produces something exceptionally unique, refusing to develop is tantamount to signing its own death warrant. However, growth does not happen by itself; it must be created, and the simplest way to do so is to attract external financing. In other words, to borrow.

A Business Loan – Essential or Not?

External financing helps a company develop by making use of all available opportunities. A business loan can be used for:

• purchasing property;

• participating in exhibitions and conferences;

• implementing new technologies;

• employee training;

• entering new markets, etc.

A business loan is a separate financial service that is nowadays available both from banks and non-bank lenders. Nevertheless, a loan for business purposes is issued subject to certain restrictions – lenders generally consider applications only from companies with at least one year of experience and from businesses with fairly substantial turnover.

Loans for starting a business are also available on the market, but micro-enterprises and self-employed persons who wish to expand their business activities and obtain financial support to fulfil their plans cannot always receive them. In this case, borrowing as a private individual may be considered – short-term or long-term loans can also help implement business plans, but these types of credit have their own specific features.

A quick loan can be useful for small everyday expenses for which there is not enough money in the planned budget. A quick loan is intended for urgent payments, while a long-term consumer loan is more suitable for large purchases.

Credit cards are highly useful for the needs of a modern company and are more convenient to use in many situations. A short-term or long-term loan is transferred in full to the borrower’s bank account, where it becomes mixed with personal funds, making it difficult to determine where the loan ends and one’s own savings begin. A credit card, on the other hand, helps track every payment made on credit and provides the opportunity to use credit-limit funds anywhere, both in Latvia and abroad.

VIA SMS Loan – Prompt Financial Assistance

The popular non-bank lender VIA SMS offers a diverse range of services for borrowers with different needs. Its product portfolio includes:

• the flexible loan, or improved quick loan, which can be repaid either after 30 days or over several months, depending on the borrower’s wishes and financial capabilities;

• the cash loan, or long-term consumer loan, available for a term of 6 to 12 months;

• a MasterCard credit card not linked to the user’s bank account.

The maximum amount of all VIA SMS loans is 3,000 euros, and each borrower is assigned an individual credit limit depending on the customer’s ability to repay, credit-history status and other significant factors. The loans are intended for private individuals, not companies, so applying for credit should be considered twice as carefully. A loan for personal consumption is available without a guarantor or collateral, but a potential borrower must consider not only the benefits of the loan but also the possible risks.

Business and borrowing go hand in hand nowadays, because almost every company’s survival depends on growth, and growth requires constant financial investment. A loan for business purposes and a loan for personal expenses are not identical, but entrepreneurs may need both services – visit the VIA SMS website and learn more about borrowing online!