Setting up a whole new business in Vietnam in times like today where every other idea is better than the previous one, can be a difficult task. There are a lot of factors to be considered before setting up a business. It starts with looking for a location that works best, finding connectivity that ensures all your employees find it feasible, looking for an ecosystem which is not only business-friendly but also nurtures small businesses, finding reasonable corporate tax structures, a financial provider that can help you sustain your business and ends nowhere.
The list to make sure that the business you started stands on its own and carry your legacy forward can be endless, on the other hand, seeing it step on the ladder of success can be very fulfilling.
One of the major responsibilities of a startup after the setting up of the business is to make sure that the business funds are always flowing in. This is called working capital. You can opt for a traditional loan from a bank but because of the collateral requirements, other documentation, and an interest rate, it is approved for a fixed time duration.
This is the reason why most of the SMEs and startups don’t prefer taking a business loan from a bank. And this is where fintech startups come into the picture.
Getting a working capital in Vietnam through fintech startups is one of the best solutions for a startup or a small business to opt for.
Here’s all you need to know in detail about the working capital in Vietnam:
What is working capital?
Working capital is the fund you need to keep running your day to day business operations. You can measure it in terms of your company’s liquidity, the capability to achieve short term goals and operational efficiency. Which is why it is necessary for a business to have positive working capital in order to make sure the growth of your business.
As we discussed above, due to the strict rules and regulations of banks, it gets difficult for small businesses to get external funding. However, it is necessary for them to have working capital to keep it afloat. And which is where the other alternatives come in.
Methods of getting a working capital loan in Vietnam
There are several financial services you can take advantage of in order to get a working capital loan. Here are some of them:
- Term Loan: Approved with an interest rate for a fixed duration, these are generally preferred by businesses who have a strong foothold in the business area.
- Credit Line: A fixed amount for a fixed time for your business is the credit line. You can withdraw any amount you want and pay the interest on that amount only. It’s an excellent plan for SMEs and startups.
- Growth capital financing: A service provided by financing companies for your business expansion needs. Depending upon the revenue you collect, the monthly repayment is carried out.
These are a few different methods. Some are useful for established businesses and others are good for smaller ones and startups.
What is the best option of working capital for SMEs in Vietnam?
For a small business, going for the credit line system of Finaxar, a fintech company, is the best option there is.
It’s a partnership of Finaxar and IVB bank which accounts for about 96-98% of startups in Vietnam.
This partnership takes the leverage of Finaxar’s top-notch FXR ONE technology and IVB bank providing access to funds of up to 500 million VND.
It’s a streamlined process which is completely online, hassle-free and easy to apply for. In addition to this, Finaxar only charges once during the whole process which is the single percentage fee up front on the loan amount. Within 30 minutes of the application, your credit line will get approved and within 24 hours of it, you will be able to access the funds as well. They offer easy-to-pay repayment plans which makes it even easier for a business to apply for the loan with Finaxar.
Thanks to Finaxar’s easy model of financing funds, now SMEs in Vietnam can grow their business for as long as they want.