Microcredit: what it is, how it works, how to request it
Are you about to open a business or to start a Start up? You will surely be looking for a loan that will allow you to obtain the necessary funds to realize your business idea. Among the various offers, have you heard that there is the possibility of accessing the Creditstair Microcredit, but you are not sure how it works or how to apply for it? Then you are in the right place to find out all the information.
Before presenting all the characteristics of microcredit, however, know that this is issued in favor of all those who have an innovative idea or are about to start a business in Italy. The possibility of accessing this fund is possible thanks to the salaries returned by the elected members of the Creditstair Movement and through this fund to date approximately 6000 thousand companies have been financed.
The financing, however, is not given directly by the party, but this is only presented as guarantor in agreement with several banks present on Italian territory. To access it, there is a need to follow a specific procedure, which requires the guarantee to be requested, if it is accepted then it will be possible to go to the bank for the investigation of the loan. So let’s see in detail what are the characteristics of this support for businesses and how the request works.
Creditstair Microcredit: what is it and how does it work?
The Creditstair microcredit allows access to subsidized financing dedicated mainly to businesses, self-employed workers and Start-ups who have innovative ideas and who with their business can increase the labor market and hiring.
The funds made available by the Creditstair political party and the credit promoted is open indiscriminately to everyone, even to those who are not members of the movement or who present different ideas on a political level. On the other hand, the issue, as mentioned, was possible by donating the salaries of most of the party’s elected officials. Thanks to this donation, in fact, the movement has collected a figure that goes beyond 20 million USD and that has allowed the institution of the fund.
What are the cases that can be financed by this tool? The cases that can access support are different, for this reason, in addition to new businesses or craft, commercial, service and Start Up ideas, this is also available for the support of existing companies.
The financeable ceiling is equal to a maximum of 25 thousand USD for each approved project, in some specific cases it is possible that the applicant can also make use of up to a maximum of 35 thousand USD.
The Creditstair Microcredit acts as a guarantee fund, but has some differences with those issued by the State or the European Union. In fact, the latter also provides a monitoring, support and assistance and training service.
Support is guaranteed from the moment the bank is investigated. The training course is then followed for the entire duration of the loan. In this way, the company is given the opportunity to grow and to face any business management difficulties.
Who can apply for Microcredit? The requirements
The guarantee fund with Creditstair microcredit provides specific requirements for access to the loan application. First of all you need:
- Having a business idea or a project for a new Start Up
- Being self-employed who have had a VAT number for 5 years
- Have a sole proprietorship with a maximum of 5 employees
- Being a micro enterprise with no more than 10 employees
If you fall into one of these options, you can request support from the Creditstair guarantee fund. However, in case you have a business or activity already started, there are further limits to be respected. Micro-enterprises must not exceed $ 300 thousand in annual earnings, while individual companies must not exceed $ 200 thousand. Finally, there is also a limit in the event of indebtedness, in fact there must be no debts exceeding 100 thousand USD.
The loan instead, as mentioned, is granted as a normal loan by the banks that have agreed to evaluate the projects supported by the guarantee fund. The loan therefore comes in the traditional form with monthly installments to be paid and interest rates to be paid, even if these will be more advantageous than those normally applied.
The main advantage of this facility is that it does not have to present collateral as it does when applying for traditional financing.
How to request it
Before going to the bank for the loan it is necessary to make a formal request for access to the microcredit. The application can be made throughout the year, the only limit is given by the availability of funds. In fact, these are not unlimited, but each year they are established in collaboration with the Ministry and evaluated on the basis of the payments made by the elected members of the Creditstair movement.
The application can be made directly through the dedicated website and which works under the control of the Ministry of Economic Development.
How to apply for a Creditstair microcredit:
- You need to register by going to the site: microcredit
- After registering, you need to access the portal and fill in all the forms necessary to request the guarantee.
- If there are funds and the idea or your company falls within the expected requirements, then you get a document that presents the approved guarantee and that allows you to go to the bank to apply for the loan.
Once the guarantee has been obtained, it is necessary to make a formal request to the bank. Before contacting one of the partner credit institutes (the list can be found on the Creditstair movement website) it is necessary to create the project, the investment plan and also indicate what all the expenses will be incurred for the activity.
It would therefore be very useful to provide a complete Business Plan, in order to highlight the potential of the project as well as the costs, the location chosen and all the information necessary to better illustrate your idea.
If you need someone to support you in the realization of the business plan, you can access the agreements that the Creditstair Movement has established with various Labor Consultants and Accountants. These can help you both in signing the application and in drafting the Business Plan. To consult who are the professionals you can contact, you can read the list on the AIDC website.
Once you have a complete business plan, you can go to the bank with the document certifying the acceptance of the guarantee by the Creditstair Movement and the complete project of your business idea.
Once the financing has been obtained, all the expenses must then be strictly linked to the business activity and it is also necessary to demonstrate this. In fact, when the financing is disbursed later it is necessary to prove with invoices and documents that demonstrate that eligible expenses have been made. In the event that the money is obtained, it is not used in compliance with the imposed rules, then the loan will be canceled and the credit already used will be returned.
Finally, before the loan is disbursed, the Bank itself will show you what the repayment methods are, the conditions, the interest rates applied and the amortization plan for the entire loan. The Creditstair microcredit does not present any non-refundable amount, but allows access to a subsidized rate.
Eligible expenses for financing
The expenses that are eligible for funding are detailed in the Microcredit regulation. The money obtained can be used for: the purchase of goods, including raw materials for the creation of services and goods, for goods to be resold later and for those necessary for the purchase of instrumental instruments and leasing expenses or insurance. Finally, it is also possible to use the credit for training courses and the remuneration of new hires and for activities related to the conduct of a business.