Qredits makes realistic business dreams come true
Imagine you have this wonderful business idea, a dream, and whatever you do, it keeps calling and knocking on your door. You can’t let it go. And although you are convinced you have found the perfect niche, things didn’t quite work out yet. The different banks you visited to get the financial means for your plans are not very willing to take the risk. You brood, deliberate, you might even start second-guessing yourself. The only thing you need, to start up would be some seed capital and assistance. Or maybe you already have your own business but you would like to expand, grow and explore new markets. You would like to finally chart that new course your company needs and start innovating. But new directions, innovation demand investment and you just lack that little bit of extra money to put your plans in motion. Even though you are sure it will pay off and make your enterprise even more profitable, and even if you are a well-known and respected client at the banks, they will not provide you with the capital you need. You do not manage to obtain the loan that will enable you to upgrade, build and expand or break new grounds.
If you recognize any of the above, Qredits might be your solution. This Dutch non-profit microfinance foundation is operating in the Netherlands since 2009. In 2015 they expanded their services to Bonaire and just recently, March 2017, they opened office in Aruba. Aruban entrepreneurs can now apply for a business loan up to 50.000 Aruban florins. Moreover in order to help their applicants on their way to success, Qredits offers them support and guidance by teaching them how to write a business plan. Banks are not willing or unable to lend small businesses because the whole process combined with the risks involved might not be very profitable. That’s why starting entrepreneurs find it harder and harder to get their plans financed, explains the general director, Elwin Groenevelt. It is also the reason why the banking industry doesn’t see the micro financer, with over sixty employees, 650 voluntary coaches and a total of more than 9.000 loans worth a little over 170 million euro, as a competitor. The organization is actually helping them because once successful the entrepreneurs are expected to become profitable clients.
Three fundamental pillars
Qredits is a non-profit organization financially supported by the Dutch and Aruban government, insurance companies and the banking industry. Their office on Aruba is run by Oliver Vieira. His and Qredits’ main goal is to stimulate entrepreneurship on Aruba by focusing on funding requirements of SMEs (small and medium enterprises). In the long term this is expected to influence and boost the economic development of the island. In order to do so the microfinance foundation concentrates its activities in three areas. The most important pillar in the approach is of course granting of loans. But before one can actually apply, one needs to write a business plan. A business plan lies at the heart of each and every successful idea or dream. Thus Qredits helps (starting) entrepreneurs to write their own. Through a specially designed e-learning program applicants are taught to write this plan in a step by step manner. ‘Every starting entrepreneur needs to structure and work on his or her idea. Figure out the details, a strategy, the costs, the how, when and why. It forces people to look at the whole picture and to think of basically everything. Lots of starting entrepreneurs underestimate what having your own business actually means’, Groenevelt adds. Qredits developed several tools to make this process easier. On their website they offer free templates you can download.
These templates form the framework you need for your business plan. In order to help you fill in the details of this framework properly (starting) entrepreneurs can subscribe for the e-learning program which is offered in Papiamento, Spanish, Dutch and English.
This online course entails everything future entrepreneurs need to know about how to start their business and at the end of it you will have your business plan ready. The last pillar in Qredits approach is education. To stimulate entrepreneurship on Bonaire for example the micro financer developed special entrepreneurship schooling programs for youngsters and adults in cooperation with educational institutes on the island. ‘Students often don’t realize entrepreneurship is the future. So we teach them, what it takes and how to write a proper business plan’, clarifies director Groenevelt.
“If they back their promising ideas with a solid business plan and accept our guidance, we likely offer them this flexibility”
Business adviser, Oliver Vieira, who runs the Qredits’ Aruba office strongly believes in this mission and approach. The coaching and schooling part still needs to be developed for Aruba as the office has just recently settled. At the moment, he concentrates mainly on successfully introducing and promoting this totally new concept on Aruba. For the first month Qredits Aruba received over fifty potential applicants and the amount of applications is expected to grow fast. ‘Qredits offers SMEs a fantastic opportunity to develop and grow. Due to the risks involved the local banks on Aruba are neither able nor willing to grant a loan, but we do. If they back their promising ideas with a solid business plan and accept our guidance, we likely offer them this flexibility’, he explains.
According to Vieira, who just as the general director has many years of experience in the banking industry, the challenge to start is not about the quality of the ideas or a lack of knowledge or experience, because the people who visit him have unique, refreshing and very innovative ideas and more than enough knowledge and experience, but it is the business plan and getting the whole picture right. More specifically it seems hard to obtain a true and realistic understanding of their market and the expected revenue. But it is also the greatest and most satisfying part of his job. ‘To be able to help people to achieve their goals in their very own way, helping them to make their dreams come true, and by doing so also helping Aruba’s economy grow. It is almost too good to be true’, the business adviser answers.
So far, the ideas and applications have been evenly spread throughout the various industries on Aruba. Applications mostly relate to the tourism industry activities, wholesale and retail and in some cases are concentrated on natural and organic products. According to Vieira the latter definitely seems to be a trend worldwide with more and more businesses offering nontraditional products. The worldwide call for organic products has influenced Aruba and will continue to do so due to the significant exposure of the island to international markets.
Granting loans in the future
Right now Vieira runs the Qredits’ office on Aruba on his own, however Qredits Aruba is expected to produce a minimum of eight applications a month and the interest in Qredits’ services is growing on a daily basis. Therefore there are already plans to add another business adviser.
Not in the least because once a business plan is filed through Qredits’ website Vieira strives to contact the applicant within one week. The moment all required documents are obtained the Aruban office tries to provide a decision within three weeks’ time.
In his assessment of the plans the most important thing is a thorough evaluation of the risk involved. In order to do so he looks at the track record of the applicant, possible debts, insolvency, the credit history, the feasibility of the plan and its goals. After all, an applicant needs to repay the entire loan including the interest during the term of the loan which may vary from one to ten years. For now, the first applicants are almost ready to make their dreams come true.