Revolving and dynamic credit: discover these solutions for SMEs

Revolving and dynamic credit: discover these solutions for SMEs

The credit market is constantly evolving. Not only do the credit conditions, interest rates, long-term maturities, etc. change, but the products themselves are constantly evolving. In our article we present two new SME financing products offered by Loanfix that meet specific needs.

Evolution of PMI credits

credit loan

The form of credit most frequently used by companies is “classic” SME credit. It is a loan paid in one go, the sum of which must be repaid at an agreed maturity in the form of monthly payments including amortization and interest. Companies can obtain such a loan from a bank or go directly to a specialized intermediary.

In terms of development, peer-to-peer has grown strongly in recent years due to the slow decline in banks’ dominance in the credit market. If you are interested in a simple corporate credit with or without a bank, Loanfix offers solutions for “classic” SME credits.

New types of credit: dynamic credit and revolving credit

New types of credit: dynamic credit and revolving credit

Thanks to constant innovation in the credit market, new solutions have emerged. These products differ from traditional loans in the way they operate while maintaining the same starting objective, namely the ability for a company to obtain liquidity.

Dynamic credit

Dynamic credit

Dynamic credit is a particular type of credit that can be viewed as an alternative to factoring. The company has a flexible credit limit to finance its needs. Dynamic credit thus eliminates the need to wait for customers to pay. This service is a specialized financial product that differs from conventional credit in several respects:

  • The amount granted directly depends on the annual turnover and the expected revenue.
  • Receivables from customers act as a guarantee for the amount received

Dynamic credit differs from other types of credit in that it is a product designed to accelerate cash flow and improve equity. Liquidity is not immediate, but the company receives a portion of the loan every time it makes a sale. Here are some advantages:

  • This service allows to obtain liquidity without waiting on the payment of its customers
  • It is a real alternative to factoring for example
  • Improve your cash flow

Renewable credit

Renewable credit

Revolving credit is a type of credit that works similarly to a mortgage: the borrower receives a certain amount paid directly, of which he pays only interest. There is therefore no amortization during the term of the contract. At the end of the contract, the borrowed amount can be repaid in full, or the contract can be renewed (which is why it is called renewable or revolving credit ). In the second case, the firm continues to take advantage of the borrowed amount and pays interest on it. However, it is possible to convert the product into a conventional loan once the contract is finished. With this product:

  • Monthly expenses are particularly low because only interest is billed
  • The sum can be loaned in the short term (at least 6 months)
  • The repayment can be converted into an SME loan

These two new types of credit have only recently appeared on the Swiss market – inquire with a specialist with Loanfix, who offers revolving credits as well as specialized advice for companies seeking liquidity.

Trust a specialist

When an innovative product arrives on the market, the beneficiaries of the loan do not yet know the details and particularities. It is therefore important to obtain information from a competent consultant. Loanfix is a financial market expert who, in addition to loans, also offers new types of products such as dynamic credit or creditp revolving. We recommend anyone who wants to get a loan to request detailed information on the functionality of a new product and to analyze the situation of their company. You will find all this on Loanfix.

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