Business loan

What a business loan is

In practice, “business loan” covers several quite different products, and the distinction matters because it decides what you will be asked for. Working capital covers day-to-day needs such as buying stock, payroll, or bridging the gap between when you pay and when you are paid. An investment loan finances something that stays in the business: machinery, vehicles, premises, expansion into a new space. There are also programmes with state or European support, which have their own eligibility criteria and their own deadlines. The real difference from personal borrowing is that what is assessed here is not a person but an activity. The lender wants to see whether the business produces enough to service the new obligation, and whether the use of the money makes sense.

Which documents you need

The file has three parts. The company part: articles of association, a certificate from ΓΕΜΗ (GEMI, the General Commercial Register), details of the partners or shareholders, and documents showing who represents the company. The financial part: balance sheets or tax returns for recent financial years, periodic VAT returns, tax and social security clearance certificates, and a statement of existing loans. The third part concerns the investment itself and is often underestimated: what exactly the money is for, with quotations or invoices where they exist, and how the loan will be repaid. You do not need a business plan of many pages. You need a clear picture of what will change in the business with this money, and why that change produces the income that will cover the repayment. New businesses without a track record are assessed on other criteria, usually with more weight on security.

How long the process takes

Assessing a business request is as a rule more complex than a mortgage, because there is no standard asset to value. There are four stages. First the business’s financial records are gathered, and here the time depends on how up to date your accountant keeps them. Next comes the analysis of the figures, where turnover, margins, cash flow and existing borrowing are examined. Third, if security is required, it is checked and valued. Finally comes the decision and the signing. If the request is part of a subsidised or co-financed programme, the time of the body that runs it is added, and that is controlled neither by you nor by the lender. The most common cause of delay remains the same: records that are asked for and arrive in instalments.

What security may be asked for

Unlike a mortgage, where the security is given and is the property itself, what is asked for in business lending varies widely. For smaller amounts a personal guarantee from the partners is often enough, meaning a commitment that they will answer personally if the business does not. For larger amounts, security on a property of the company or the partners may be asked for. Other forms you may meet are a pledge over equipment bought with the loan, the assignment of amounts owed by customers, or the pledging of deposits. There are also programmes where part of the risk is covered by a guarantee body, which reduces the security asked of you. Ask early what exactly will be tied up, because it also affects your ability to borrow again later.

Loans through the Development Bank and other programmes

Many state-supported business loans go through the Hellenic Development Bank. You do not apply to it directly: you apply to a bank that takes part in the programme. The support usually takes one of three forms. A guarantee, where the programme guarantees part of the loan and the lender asks for less security. Co-financing, where part of the loan is given at a very low interest rate. And an interest subsidy, where the programme pays part of the interest in the first years. Recovery and Resilience Facility loans are expected to be completed by the end of 2026. According to press reports, the Development Bank is preparing new programmes for small and medium-sized businesses. Programmes open and close often, and each has its own criteria. Before you base your plan on one, read the terms that apply today on its official page.

How we help

We listen to what the business needs and work out with you whether it is working capital or investment — because each leads to a different product and a different assessment. We tell you honestly whether the request has prospects on today’s figures or whether something needs putting in order first. Then we put you in touch with lenders who deal with your size and sector. We do not lend and we do not make approval decisions — the decision is the lender’s. The first contact costs nothing and does not commit you, and how we are paid is disclosed to you from the start.

What happens if the request is refused

With business requests, a refusal is often about timing rather than substance. The typical reasons are specific. Existing borrowing is already high relative to the size of the business, so restructuring is discussed first. The latest financial records show a fall that the file does not explain, so the explanation must go in, because a bad year with a clear cause is treated differently from a bad year without comment. There are overdue debts to the tax office or social security funds, which as a rule must be settled before anything else. Or the business is very new and has no track record yet, so alternatives with security or guarantees are looked at. Always ask for the reason for the refusal in writing. Without it you are working blind, and the next attempt is very likely to stumble at exactly the same point. With it, you know what has to change and how soon it can change.

Documents at a glance

1. Articles of association and ΓΕΜΗ (GEMI) certificate
2. Balance sheets or tax returns for recent financial years
3. Periodic VAT returns
4. Tax and social security clearance certificates
5. Statement of existing loans and obligations
6. Details of how the funds will be used — quotations or invoices where they exist

Additional services: save time

A loan takes paperwork, deadlines and patience. If you would rather not go from office to office yourself, we handle it, as an accounting firm:

• Gathering and organising documents
• Tiresias and debt settlement

Fee: €100 for individuals and sole traders, excluding VAT. For companies, by quotation. They are optional and separate from the loan: you choose them, if you want, at the last step of the form. All the details.

Frequently asked questions

Can a new business with no turnover get a loan?

It is harder but not ruled out. Without a track record, the assessment rests more on security, on the owners’ own funds and on their experience in the sector. Some programmes are aimed specifically at new businesses.

What is the difference between working capital and an investment loan?

Working capital covers day-to-day needs such as stock and payroll, and is repaid over a shorter time. An investment loan finances something that stays in the business, such as fixed assets/equipment or premises, over a longer term.

Do I need to give a personal guarantee?

Small and medium-sized businesses are often asked for a personal guarantee from the partners. Whether one is asked for, and how far it goes, depends on the size of the request, the business’s finances and the particular lender.

I have tax debts in a repayment plan. Is that a problem?

An active plan that is kept up to date is treated very differently from overdue debts with no plan. Declare it from the start with the plan’s details, because if it comes up later in the checks it does more harm.

Do I need a business plan?

Not a long one. You do need a clear answer to two questions: what exactly the money is for, and where the income that will cover the repayment will come from. That can fit on two pages.

Where to check

• Hellenic Development Bank — Runs the state loan and guarantee programmes for businesses and publishes their terms.
• AADE (Independent Authority for Public Revenue) — Issues the tax clearance certificate and the tax records the file asks for.
• ΓΕΜΗ (GEMI, General Commercial Register) — The register where company details and balance sheets are published.
• Tiresias — Keeps the credit records and gives you a copy of your own data.