How to Apply for a Loan for a Small Business
Automatically translated summary. The full text is available in Romanian.
An information note produced under the National Financial Education Campaign, implemented by the National Bank of Moldova and Independent Think Tank “Expert-Grup”, explains how entrepreneurs can apply for a small business loan. It outlines the pros and cons of credit financing, the application steps and the choice between foreign-currency and leu loans.
Credit offers a predictable repayment schedule, usually lower interest rates at banks than at non-bank lenders and savings and loan associations, and full ownership. Its drawbacks are repayment obligations, interest costs and collateral requirements.
The note lists the steps: assess business needs, check your credit score, compare offers (including the effective annual interest rate), prepare documents and collateral, contact the lender, apply, submit documents, await evaluation, sign the contract, use the funds as agreed and repay on time. Lenders on average ask for collateral worth 120-140% of the loan at liquidation value, while the Organisation for Small Business Development offers guarantees of up to 80%. Foreign-currency loans usually carry lower interest but expose borrowers to exchange-rate risk. Leu loans cost more but avoid that risk. The project was supported by USAID MISRA.
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