liquidity loan

For what types of business can I use a liquidity loan?

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The liquidity credit has become the perfect ally of many great entrepreneurs and people who are just venturing into entrepreneurship because it offers several advantages and usually has low interest rates.

However, many times, out of fear or ignorance, this possibility is dismissed because it is not known precisely for what types of business it is ideal and why.

If you have a business or are thinking of starting a project, you are interested in knowing this information!

Here we are going to tell you in which types of business it is convenient for you to invest a liquidity loan to start realizing your objectives from scratch or to grow your business even more.

Young woman workingWhat is a liquidity loan?

This definition has been covered in much more detail in previous articles, so we will limit ourselves to synthesizing the information.

A liquidity loan is a financing in which you leave some property as a guarantee of payment to obtain resources with a free destination.

But… for what types of business is it a good idea to use these resources? Now we are going to tell you.

Man counting money Types of business to which I can allocate a liquidity loan

There are several types of business depending on the economic activity, its legal form and its size. On this occasion, we are going to focus on all those for which a liquidity loan can be used without so much distinction.

1. Large companies

Liquidity credit, of course, is an excellent option for large companies because they are already built companies that have a more or less stable financial situation, so they can continue to grow with the help of this economic boost.

Due to the current situation, due to the pandemic, many large companies have been affected, being on the verge of insolvency or, even, going bankrupt due to not being able to offer their services or generate sales.

However, all is not lost. Liquidity credit is ideal for this type of business because it provides you with resources very quickly to face the crisis and respond to immediate commitments, keeping you on your feet while you can level your expenses-earnings.

Work team

2. SMEs

There is a wide range of financing for SMEs (small and medium-sized companies); from government institutions (the offer here is not so great) to independent companies.

However, among all of them, one of those chosen by more than 60% of the companies are the Sofomes (Multiple Purpose Financial Companies) because they request fewer requirements and obtain more opportunities.

When it comes to this type of business, liquidity credit can be especially useful to pay payroll, acquire raw materials or machinery, among many other productive purposes.

Young people working

3. Microenterprises

In the area of ​​microenterprises, there is government support, but it is quite limited in terms of the amount granted, which is usually between 15,000 and 35,000 pesos.

This, many times, is insufficient for what this type of business needs to carry out, so they end up acquiring several loans with different companies or organizations, affecting their finances.

The liquidity credit eliminates this aspect since it grants up to 50% of the value of the property that remains as collateral, helping to make a single monthly payment and achieve a better organization.

Having these extensive categories of business types for which a liquidity credit is an excellent option, let’s move on to the classification according to activity so that there are no doubts.

Young man assembling furniture

4. Product business

This type of business is one that incorporates added value to raw material and transforms it to respond to the needs of the people it is aimed at.

These businesses are the ones that allow you to market all those things that are found in nature.

These companies are usually quite varied and can be subdivided into sectors, for example, the textile and food industries, among many others that work with tangible goods.

Liquidity credits play a very important role in this type of business because they can hardly be sustained with 100% own resources; they need to make investments and then the profits come.

This financing can help you to acquire wholesale raw materials to obtain better prices, you make deals with suppliers, among other options.

Young women planning

5. Service businesses

This type of business lends some intangible good to people, based on the possession of some skill.

In these cases, the company or business does not depend directly on a production chain, but rather has something whose effects or functions people demand.

Companies within this line of business often use liquidity credit to acquire software, pay payroll, obtain working capital, continue preparing all their teams with training, etc.

Generally, it is used to achieve growth and begin to reach more places or offer more and better services.

Young people working

Liquidity credit, your ally at all times

As you have been able to realize, liquidity credit adapts to any type of business, but before acquiring or requesting it you have to be very clear about what you are going to use it for and why.

The above, due to the fact that these are relatively high sums, so you have to be sure that you will be able to respond to the commitment that you are about to contract for a somewhat long period (the terms are usually 5 to 15 years) .

The only thing for which it is not so recommended is to undertake since uncertainty is usually high and you must have certain guarantees before opting for debt in a positive way.

Handing over money

If you have a type of business like the ones mentioned in this article, liquidity credit is the best option for productive purposes such as:

  • Grow your sales
  • Make payroll
  • Acquire materials or machinery
  • Get liquidity
  • Get working capital
  • Expand your business
  • And so on

Don’t overthink it and seek advice to find the best plan tailored to your needs. At ION Financiera we have perfectly trained staff to advise you on the path to success and the fulfillment of your goals. Contact us!

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