Credit for legal entities and business development - creditnice.co

Many of the beginning entrepreneurs and owners of small and medium-sized businesses quite often face the problem of a shortage of financial resources. It can be solved by a loan from a bank or other financial organization, however, before concluding a contract, you should soberly evaluate the offers that exist, as well as your capabilities.

In this article, we analyzed various lending options, as well as their features and rates for small companies.

Credit for small and medium-sized businesses: conditions of banks

Today, most banks offer various lending programs to owners of small and medium-sized businesses (SMEs). Depending on the purpose, loans can be provided for establishing a business, financing current activities, as well as scaling and implementing new projects. Let's consider them in more detail:

• business loans "from scratch";

• loans to replenish working capital;

• mortgage lending;

• lending against the collateral of the enterprise;

• investment lending;

• overdraft (form and collateral).

Not all banks issue business loans "from scratch". As a rule, in order to receive them, it is necessary to provide a detailed business plan, collateral and reliable guarantors. Since the risks involved in concluding an agreement are very high, the bank often , as well as pay for the valuation of the collateral and its insurance.

It is also possible to issue a loan secured by an enterprise (firm). In this case, the company's liquid assets, such as machinery and equipment, transport, premises or buildings owned by the client, act as collateral.

Investment lending is of interest to enterprises that have reached a certain level of development and are going to engage in new projects. Less often, this type of credit is used to develop a business or large loans for small and medium-sized businesses, primarily because of the interest rate.

According to the NBU survey, more than 70% of small business managers and about 65% of medium-sized business managers named high interest rates as the main reason for refusing bank loans. They also noted the difficulties in drawing up documentation and the high requirements for mortgaged property.

Interest rates on loans for replenishment of working capital and purchase of fixed assets vary between 17-19%. Lower rates can be found in partnership programs with equipment manufacturers or in lending in cooperation with international organizations.

Rates for partner programs depend on the term of the loan and the size of the contribution. Most often, they make up about 10% per year. At the same time, if the loan term is short and the own contribution exceeds 50%, some programs offer significantly lower rates.

Business development loans are often provided by banks against real estate, but there are also unsecured programs.

In addition to banks, lending services are provided by international financial organizations. Such loans are often cheaper for entrepreneurs than bank programs, but they require transparent and accurate reporting, which a large number of companies in the SME segment cannot provide.

Where else can you get loans for legal entities?

If necessary, you can take a business loan not only from a bank, but also from a financial or microfinance organization that provides money.

The most actively developing Internet lending services, which allow you to make loans online. They often offer unsecured small business loans with no collateral and other attractive terms. But before making a decision, be sure to compare the terms of the contracts of different companies and choose the option that suits you best.

As a rule, financial organizations do not have such high requirements for filing documents as banks, and the filing process is much faster. Some of them provide loans to private entrepreneurs without collateral. But in some cases, the cost of such a loan turns out to be quite high. Therefore, when studying the contract, special attention should be paid to fines for overdue debt, which may ultimately exceed the amount of the loan.

Credit for small and medium-sized businesses: what documents are required

One of the most important stages in obtaining a loan is the preparation of documents. Banks and other credit organizations are very meticulous in checking the package of documents and the correctness of the paperwork. If you make even minor mistakes or provide inaccurate information, the bank has the right to deny you the loan.

Each bank or financial organization has its own requirements for the volume and type of documents that the client must provide. But you can single out a list of papers needed to conclude almost any contract: But you can single out a list of papers needed to sign almost any contract:

Any loan must have documentary justification - this is an important rule of all financial organizations.

Before submitting documents for consideration, be sure to check them. Inaccuracies or random data mismatches may result in papers being returned for recycling.

Think about how much time it will take to complete the documents that you have not yet received and, if you have any doubts, you should contact a lawyer for advice. All these measures will help you feel confident when submitting an application and during a conversation with employees of the financial monitoring service.

Conditions of small business preferential lending

Many banks provide loans to entrepreneurs on simplified terms. Let's find out what are the peculiarities of issuing preferential loans in the bank for legal entities and business development, as well as in which case you may be refused financial assistance.

Of course, preferential conditions are determined by all banks individually, but general trends can be identified. Among them are: a significantly reduced interest rate, an extended debt repayment period and a simplified procedure for concluding an agreement (with the provision of fewer documents). In some cases, the need for collateral is also eliminated.

Businessmen who:

• are on the verge of bankruptcy or economic collapse;

• currently have debts to the state;

• previously received a loan, but were unable to repay it on time.

First of all, enterprises involved in priority areas for the state can count on preferential loans from banks: agriculture, construction, transport, communications, domestic tourism, food production, etc.

At the same time, commercial microfinance organizations issue loans at preferential rates according to their own rules and lists of priority industries.

Soft loans can be taken both to replenish turnover and for certain purposes. For example, you want to receive funds for business development: purchase of new equipment and premises, reconstruction of production, etc. At the same time, up to 30% of the loan can be used for current costs related to project implementation.

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