It is very difficult to decide if you own an SME what financing is right for your business. That’s why we want to give you the necessary information so you can choose between SME credit or leasing. Maybe the second term is unknown, but with the growth of SMEs in Mexico, new credit models have been created that help both an entrepreneur and an SME owner to continue with their projects.
Next, we will tell you what each one is and which one is best for your business:
Leasing has emerged as a loan that works similar to a common lease. That is, it is totally an agreement between a financier that allows to facilitate the use of physical goods such as machinery, transportation, real estate and even technological systems that allow improving the processes of your business. But the good belongs totally to the financial company, while you are paying an income every month for its use. In a few words you can finance 100% of the value of the purchase of what you need, while you pay month by month for the use of that good.
The term SME credit will sound more common, but we want to make clear what it is; This type of financing is very specific for small and medium enterprises that want to grow and reach new horizons. Since it does not limit its use to the acquisition of goods, but adapts to that and all the needs that may arise in a business. For example, to raise your capital, improve your inventory, finance a specific project or even expand your business among many other actions.
Which one suits you?
The main point of comparison, depends on the need or needs of your business at this time. That is, you may need to improve production or provide a more complete service, then leasing could help you to solve your need. But if, in addition to that, there is something unforeseen with your inventory or you achieve a very important business opportunity, which will make your SME grow, you would have to apply for a loan elsewhere. What would make your level of indebtedness grow with the possibility of losing liquidity for your entire business.
We can say that an SME loan brings greater advantages, since you can finance your machinery, software or transport fleet, and also use part of that amount to enlarge your staff, expand or remodel. Also with this type of financing you have complete control, because you can choose what and how to invest to achieve the goals of your business.
As you can see, the facilities and advantages of an SME loan on leasing are higher. With one you get an amount of money that you are free to use and with another you can only acquire one good for a certain time.
Learn more about credit for small and medium businesses in our blog and enter Herne the Hunter so that in just minutes you can discover how much we can offer to boost your business.