Starting a good business requires two things, a good idea and money. However, it is not easy for Hungarian businesses to raise capital or credit, although the situation has improved significantly in recent years. The second phase of the growth loan program is already under way, with more than enough resources available for smaller companies, but not everyone can benefit. Where can a business make money today?
The majority of domestic enterprises were delighted with the MNB’s announcement of the Growth Credit Program (NHP), which provides the cheapest credit available to the domestic SME sector. The interest is only 2.5 percent, which can be claimed for up to 10 years. In terms of the total number of contracts concluded, almost half of these contracts are related to micro-enterprises, but the smallest companies also received significant HUF 214 billion.
Undoubtedly, NHP is the cheapest available corporate loan in Hungary today and has no interest rate risk as it can be claimed at a fixed 2.5 percent. It can also be applied for loan redemption or investment. Thanks to recent changes, you can claim up to $ 10 billion of the $ 2,000 billion total.
Anyone who does not get it will go to her
Lending programs in general, but NHPs in particular, can have a negative impact on businesses that miss out on dispersion. Banks give the best, most creditworthy customers with cheap credit. Lower-rated companies are forced to finance themselves through market loans, which can be more expensive, as banks record higher losses on inferior customers.
Who gets it is good
However, those who get cheap funds reduce their risks and get cheaper market loans. This is especially true for loan takers, companies who can swap more risky and expensive loans for a fixed and cheap loan. Thanks to the NHP, these companies may even be able to re-establish credit or raise new funds at a lower cost.
There is no need to despair for executives who do not qualify for NHP. There are several other discount programs with interest rates well below 10 percent for market loans.
Currently, nearly 80 percent of Hungarian businesses operate without credit. They would need funding, but for some reason these companies cannot be funded. That is why NHP was created along with several other loan programs.
It runs from more EU money, but businesses can also get better credit through the schefi Card Program. The former loans transfer EU funds, the exchange risk of which is paid by the state. Entrepreneurs therefore get a favorable forint loan.
Euro funds flowing through the Hungarian Bank can be requested from several banks, but most of the partners on the website of the Hungarian Enterprise Finance Co. Ltd. are some form of savings cooperative or foundation. Therefore, it may be worthwhile for companies to apply not only to larger banks, but also to visit these smaller financial institutions.
The schefi Card Program also provides loans to businesses on more favorable terms. These are interest-subsidized loans, so interest rate risk is also present here.
Idea and Money
If you really believe that only these two components are in a well-run business and you have just the idea, then it might be worthwhile to start making money with a venture capital company. In many cases, less-creditworthy start-ups or start-ups can almost always have the chance to invest in a venture fund. Besides hedge funds, these hedge funds already manage EU funds worth HUF 63 billion. Investment is often in the form of cash loans, but capital increases and payments are the most common. In the latter case, at a predetermined date, the venture capital company sells its stake in the hopefully already flourishing company, for which management has a pre-emptive right.