Things you need in order to close the deal
Most starters face the same initial problem: the need for startup capital.
Everyone can familiarize with this hurdle. You notice a problem or an opportunity to start a business,
come up with an idea, and get all excited. But then you reach the point where money is the next rung on the ladder that you need to climb to reach your goal. And there you are, asking yourself what to do. There are quite a number of possibilities from which you can choose, but in this article we will focus on the most common option: financing by a financial institution or Qredits, the new player in the field of financing on Aruba.
During the process of starting up a business it is important to do a thorough research and to acquire at least some professional advice. The Aruba Chamber of Commerce (ACOC) is always at your service. You can contact us whenever you have questions or when you need help or advice on how to proceed with your startup. Just call us to make an appointment or acquire the information you need on arubachamber.com. On our website you can also send in a request for information from the online registry. The Department of Economic Affairs is another good source of information for starters who are in need of the required permits and licenses to do business in Aruba.In regard to financing it is important to have certain documents in place, which can facilitate the process. And be assured, a well-written business plan goes a long way.
Steps towards financing your Startup
To start a business you need to have at least some kind of capital. The type of business you want to pursue will define how much you need to get started. In case you do not have the necessary financial resources yourself, you should consider reaching out to a bank and apply for a grant.
Obtaining a loan is not an easy task. It can however become more accessible if you do your research and collect the necessary information. The information you provide should give the bank a realistic projection of your startup. The more realistic and thorough your projections are, the better the chances you will be granted financing. It is very important that you know exactly what your business is about. You need to live and breathe your business idea, know all the ins and outs including its current situation and where it is going. You have to able to answer questions like: who are your customers, who are your competitors, what type of market are you trying to be part of or is it a new one, what distinguishes your business from the others, how innovative is your approach really, what will be the costs, what would be a profitable selling price and why, and so on. At the start of your business you also need to know which legal form suits you best.
Are you starting alone or are there other business partners involved? What type of risks can you foresee and are you willing to take? Who will work for you or with you? To what extend will you need manpower or machines to make the business grow? Clear answers will give you a better insight into the realization of your business. Moreover, they are the To pave the way for your business idea you will have to formalize it. A business plan will help you to do just that and it is the best starting point. A solid business plan demonstrates that you know what you are doing and why. It shows that you are serious about the idea and that you are willing to take the risks involved. And last but not least, it will enable you to coordinate the startup and to establish a business that remains successful.
Qredits
Microfinancier Qredits is a newcomer in Aruba when it comes to financing entrepreneurs. Backed by the Government of the Netherlands and Aruba, Qredits has been established to help finance starters who are not eligible for financing through the existing channels. If the requirements are met, Qredits offers financing up to AWG 50,000. Besides the fact that Qredits’ requirements are relatively more flexible compared with the ones of a commercial bank, the foundation also provides guidance to help you become eligible for financing. As with the other financial institutions, the microfinancier considers a well-funded business plan most important. In other words, a business idea must be founded on a solid business plan describing its potential. You can apply online and upload the required documentation. Qredits will analyze your business plan including the marketing and investment plans you have. The business advisor of Qredits will inform you within five working days if there are any gaps or if you need to add information.
You might get the advice to complete the business plan e-learning course in order to increase your knowledge about starting a business and writing a business plan. Take the course, it will increase your chances to establish a successful business. After the initial review the advisor will arrange for a meeting in order to guide you through the available financing possibilities.
Commercial Banks
Applying for a loan at a commercial bank is the traditional way to finance your business. However, only a few people are able to meet the requirements. Commercial banks have to comply with the regulations of financial authorities and therefore need to exercise their due diligence. But as with Qredits, the same applies here: make sure you have covered all the issues, can answer all the questions and back your story with a solid business plan. All business ideas have their own story and their own specific needs, just acknowledge that, think it through, give your idea a solid base and remember you will only succeed when you keep pursuing your goal. Persistence pays off.