Compare the best options on the market and choose the one which best adapts to your day-to-day needs.
Our Rating: 9.5/10
- Loans available for any purpose
- Friendly interest rates including a 12.1% annual interest rate
- Flexible loan limits of up to €50,000
- Convenient repayment periods of up to 120 months
- Few additional loan fees
- Fast concessions
- Fewer eligibility criteria
Banco BPI Portgual
Our Rating: 9.2/10
- Flexible loan amounts of up to €30,000
- Long repayment terms of up to 72 months
- Available for a variety of purposes
- Attractive interest rates and 11% APR
- Fast approval within 24 hours
- Insurance is optional
- Top loan conditions
Our Rating: 8.9/10
- Flexible loan size of up to €30,000
- Fast approval process within 48 hours
- Hassle-free application through an online platform
- Customizable repayment period of up to 120 months
- Less stringent eligibility criteria
- Prefers funding applicants with an income
- Fixed interest rates on long term loans
Banco Santander Totta S.A.
Business Loans in Portugal, All You Need To Know:
It’s our job to let the reader know everything about financing your business in Portugal. Take a quick read to get a hang of the types of credits available, the latest news about financing, and all the requirements and documentation required to hire this type of consumer loan in Portugal.
[UPDATE] What economic measures has the Government implemented for companies through covid-19?
Just like many countries across the world, Portugal was greatly affected by the Covid-19 pandemic. Nonetheless, the government stepped in right from the onset to cushion companies from the harsh effects of the lockdown both directly and indirectly. The government, therefore, issued orders and set in place some legislative acts, and policies that would help companies survive through the pandemic.
- The government announced on March 18, 2020, that it was setting aside EUR 9.2 billion, which would be channeled to credit guarantees, granting of soft loans and SMEs, fiscal stimulus (which covered more than half of the funds), and tax payment deferrals.
- To support liquidity and temporary layoff the state channeled EUR 80 million to loans for small businesses and startups.
- The state announced EUR 400 million to finance SMEs.
- Bank loan repayment for small businesses was deferred for 6 months during which companies went without paying neither the capital nor the interest. Companies in the tourism sector also enjoyed deferral of tax payments and social security contributions.
- The government established liquidity measures that involved moratoriums for businesses affected by the pandemic which lasted till September 2021. The policy introduced new loan maturity periods and grace periods.
- The government had granted more than EUR 1.2 billion to SMEs and entities that had been affected by the pandemic by October 2021. These funds were granted to SMEs which faced a 25% loss in their turnovers.
Distinguishing types of company profiles
Financing for your business greatly depends on the type of business it is. The features of your company will be great determinants of the type of financing your business qualifies for. Below are the different forms of businesses:
- Entrepreneurs: entrepreneurs come up with ideas and plans of what they wish their business to be. They are able to identify the economic need of a particular area and come up with a business plan to address it. However, their plans only materialize when they get financing.
- Start-ups: this type of business is a step ahead of entrepreneurs. The business already exists but is not solvent enough to qualify for big business loans. Hence, it requires some time and consistency in its operations to gain ground.
- Consolidated companies: as the name suggests, these companies are long-standing, make big profits, and are stable in their operations. The companies qualify for big loans because of their high solvency.
- Large companies: these companies have the largest scale of operation (national or international). They have big turnovers and their needs are in millions of euros.
- As legal entities: these are individuals who own a business. The business is run individually and qualifies for financing depending on its scale of operation. However, these loans are adapted to a single person.
- As natural persons: this refers to people who are not employees and have their ways of getting income.
Characteristics of business loans
Different business loans have different characteristics which also depend on the lender. However, the measures to use in comparing these loans are the same and are listed below:
- Cost: This is the first feature you’re supposed to look out for every time you think of financing your business. A loan is considered good debt if the interest rates are friendly because it will allow you to improve your business, meet all the business needs and reimburse the credit without straining.
- Amount. A business will qualify for a certain amount of credit depending on its scale of operation and its turnover. The smaller the business the smaller the amount of loan it’s likely to get.
- Purpose. Depending on your lender, different purposes have different loan conditions. Hence, consult with your lender to find out their conditions for whichever purpose you have, e.g. expanding your business, buying machinery, clearing arrears with your suppliers, etc.
- Linkage. Especially in banks, financing always comes with related products such as insurance, business accounts, or other products of mandatory recruitment.
- Term. This is determined by the purpose, amount, and conditions set by the lender. Your business profile will also determine the type of financing and your repayment period.
- Grace period. This is a period during which the loanee is legally allowed to go without making the loan repayments.
- Guarantee. This applies to big loans where the lender requires “payment insurance” with a guarantee or collateral.
- Speed. Be sure to know when you’ll receive the funds after your loan application is approved because some loans tend to grant loans months after application.
- Repayment. Before signing up for a loan, it’s important to know how you’re required to be making repayments. While others have a monthly installment repayment criterion, others will have you pay the principal amount, the accrued interests, and commissions at the end of the loan term.
Where to get business loans
Many entities providing consumer loans have broken into the Portuguese financial market and diluted the monopolization of banks that went on for many decades. The evolution of the financial systems in Portugal brought about affordable financial products that are adaptable to different loan needs. Hence, regardless of the uniqueness of your financial situation, you can secure a loan that’s consistent with your business and its needs.
Which entities provide business loans in Portugal?
- Banks: these are the oldest and the most popular providers of business loans. The loans are only given to firms that prove to be solvent enough to repay the loan, among other factors. Nevertheless, SME bank loans are now offered under better conditions and have fast concessions.
- Companies and private capital lenders: the process of applying for a loan and receiving the funds is faster under this category than in others. The application is completely online. Their financial products are offered in excellent conditions which either compete with banks or are better.
- Alternative financing platforms for crowdlending: these are platforms belonging to companies that help borrowers connect with investors. Once connected, it’s the investor’s prerogative to contribute working capital to the borrower or not. Once the borrower starts repaying the loan, the investor will receive the interest. The whole application process to the processing of the loan happens online and the borrower is attended to in a matter of two days.
Different financial situations will make us qualify for different kinds of financing. Hence, be sure to make a thorough financial audit to establish which loan your company qualifies for and which you’ll be able to reimburse without problems.
Business loan conditions
According to the Portuguese Law on consumer credits, there are basic requirements that every business owner looking for a loan must meet:
- National registration: the business or firm seeking financing must be registered and working under the Portuguese Law governing and monitoring businesses within Portugal. In this way, lenders won’t be skeptical to offer financing.
- Annual income: with these records, lenders will be able to assess the solvency of your company before offering financing. The lender will compare your profits and business expenses to determine whether or not you’re able to afford the loan you’re signing up for.
- The seniority of the company: while there are loans tailored for small businesses and startups, big loans will only be available to consolidated companies which will be solvent enough to reimburse the loan.
- Good credit history: work to ensure that your company maintains a positive credit history with the Portuguese Central Credit Register. A negative credit score will frustrate your ability to obtain financing.
Documents needed to get funding
- Corporate Tax payment receipt
- Income tax return
- Bank statements
- An annual balance sheet of the company’s turnover
- VAT return
The submission of these documents may be online or physical, depending on the entity’s preference.
Other forms of financing for companies
Business credit lines
These are a unique form of financial products that grant you a certain amount of money, which you are free to take out bit by bit. If planning to repay the money, you’ll be required to repay the principal amount which you’ve withdrawn plus its interest instead of the whole amount that’s given out.
This form of financing majorly suits the self-employed and SMEs, where the borrower chooses to clear invoices with about two or so suppliers later. The lender, hence, transfers the funds directly to the supplier, after which, we will repay the lender the cost of the loan and the interests as well as other charges.
P2B or crowdlending loans
Through these online platforms, the borrower connects with a private investor, who decides on whether or not to invest in the business project. The conditions of these credits depend on the crowdlending platform we use and the investor company we choose.
Loans with mortgage guarantee
These are mortgage loans that offer financing only if the borrower is able to present some form of guarantee. In this case, the borrower must present property that’s more or less equivalent to the amount of loan they get.
Products to invest in our company
These are online platforms that recently got their way into the Portuguese financial market. The platforms connect the borrower to private investors and professionals, who invest in our business projects. However, before committing to these loans, it’s important to note that the investors and professionals will get a share of your company and take a percentage of your business’s profits.
Just like in equity crowdfunding, the borrower connects with the investor through an online platform. However, the company offering these loans will decide whether to have their Business Angel invest in your business or not. The investors will have a share of our company and they mostly invest in big business projects.
3F (Friends, Family, Fools)
The 3 F’s (Friends, Family & Fools) refer to people who offer financing for our business projects, either family, friends, or fools. The conditions of financing depend on the agreements made by the lender.
Aid for the financing of companies
Capitalization of unemployment
This type of financing is only eligible to the unemployed who wish to start up a business. They, therefore, collect any unemployment benefits that are designed to suit them.
Through crowdfunding platforms, borrowers can obtain financing from sponsors who are interested in our projects. Hence, the entrepreneur or business owner publishes their business projects on the platform where the investors will see and reach out to them.
About this page, our methodology
About this page: we are out to help you to get the best financial product that’s consistent with your financial situation. We, therefore, marshal the best available information about consumer credits and what factors to consider as you compare the options so you may end up with the most attractive product at the moment.
Source: the information regarding the main characteristics of loans in Portugal and their current regulation comes from the Banco de Portugal, the Portuguese Consumer Credit Act, among other reference portals.
Methodology: The data relating to the conditions of these products (amount, term, interest, etc.) have been obtained through online research and consultation of the official statistics of the aforementioned reference sources.
About Us: FUNDGECKO is an online comparator website that helps borrowers who are indecisive about consumer loans and what option to hire. We help our users compare the options like pros by providing all the information they need about consumer credits and how to end up with an option that best addresses their situation.
Note: the services we offer are totally free for the user, as FUNDGECKO obtains its income from advertising and its featured products.