Monetary management and earnings projection enhance probabilities of credit score approval

Monetary management and earnings projection enhance probabilities of credit score approval

Conquering the trust of banking institutions is one of the main challenges for entrepreneurs

To increase the chances of getting a loan, micro and small business owners need to put their house in order before going to the bank. The more organized the income projection and business management are, the greater the chances of credit approval.

“Most entrepreneurs don’t have the company’s financial controls. The ideal is to have a system, a management software to make entries and generate reliable reports”, says João Batista Costa, Sebrae-SP consultant.

“When the entrepreneur presents this, he manages to demonstrate the situation of the company [e passar credibilidade]”, he says.

Owners of bakery Pães WDL, Anna Paula Soares de Oliveira, 39, and her boyfriend, Rodrigo Borba, 39, are getting ready to apply for credit.

The business started in 2018, when they started selling natural fermentation breads to friends and family. The products were made in the kitchen of Rodrigo’s house, in the east zone of São Paulo.

In the pandemic, the business grew and the couple decided to professionalize production. They sought credit from the BNDES (National Bank for Economic and Social Development) and private banks, but were unable to do so.

At the time, the company had revenues of around R$3,000 per month and handled an average of 15 orders per week. The solution was a pre-approved credit of BRL 20,000 for individuals, financed in the partner’s account. With the money, they bought machines to prepare the dough and an industrial oven.

Today, the couple receives about 25 orders a week and has increased the product line, which cost between R$15 and R$40. For next year, the goal is to expand the business. “We are thinking of hiring someone to increase production”, says Anna. Another idea is to open a physical store.

Before applying for credit, she will complete a study of the company and project earnings for 2023. For Anna, the biggest difficulty is assuring the lenders that she can fulfill her commitments.

“They evaluate the time at the company, the business profile, how much is entering the account… It is difficult to be approved.”

Owner of a dental clinic in Sertãozinho (inland São Paulo), dentist Valter José de Paula Júnior, 47, tried to get credit to expand his business in 2019, 2020 and 2021.

But, by dividing its accounting between invoices issued by the company’s CNPJ and receipts in its name, it did not have consistent data to present to the financers.

The alternative, at the time, was to resort to Sicoob (Brazilian Financial Cooperative System). Now, it intends to obtain financing in a line of credit.

To this end, it restructured the entire management of the enterprise and adopted an online system to record procedures. It also hired an administration professional.

“It’s a big change in terms of cost, but today I have a company running and I’m looking for the benefits of that”, he says.

Most entrepreneurs do not have the financial controls of the company. The ideal is to have a system, a management software, so that you can launch entries and generate a reliable reportJoão Batista Costa

Consultant at Sebrae-SP

If the credit is approved, Valter wants to set up a new service room. “I already have the space and now I need to buy the equipment.”

Isac Costa, professor of fintechs at Ibmec, says that controlling finances can prevent entrepreneurs from entering into unintelligent agreements.

“This can help the entrepreneur to get money at the best cost. If you don’t understand, it will depend on the bank manager to offer you a line of credit.”

Partner and executive vice-president of Invent Smart Intralogistics Solutions, Augusto Ghiraldello, 36, saw his gross income grow from BRL 10 million in 2018 to BRL 25 million in 2020, after financing the expansion of the factory.

The company develops technological solutions for logistics, from artificial intelligence tools to automated conveyor belts.

According to Ghiraldello, the parts for building the systems came from abroad, until he and the two partners decided to work with their own manufacturing.

They made two credit requests in the amount of R$ 1 million, one to increase stock, the other to expand the factory. The lines chosen were the BNDES urgent financing due to Covid, in the category plus working capital, and the FGI (Credit Risk Guarantee Fund), from the same institution.

After the financing, the company was able to develop an automation project for Cacau Show in three months.

The case increased the visibility of the business, which today has units in São Bernardo do Campo, Alphaville and Embu das Artes (São Paulo), Betim, Extrema (Minas Gerais) and Miami (USA). This year alone, the company tripled its 2020 turnover.

For Ghiraldello, the routine of documenting operations facilitated the approval of credits. According to Costa, from Ibmec, it is increasingly important that businessmen know the capital market, in order to have financial autonomy.

Source: Leaf

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