The choice of a suitable type of loan for business is done taking into account individual tasks and requirements. Among the most common credit programs for business is worth noting: Leasing with redemption rights in the long termfactoring invoices. Overdraft – loans for business in an amount exceeding the balance on the current account.
Financing of business when providing a business plan, justification of profitability
Which bank to choose?
Large federal banks are the ones. The main advantage can be considered a developed branch network. Consideration of an application for a loan for business development occurs quickly due to a well-established system of work with borrowers. But there is less flexibility – large banks are not ready to take into account the individual needs of customers. This is where the factoring invoices are important.
Medium-sized regional banks
Despite the smaller line of loans for business compared to federal banks, they benefit from good service in working with clients. As a rule, the average regional banks are better adapted to the needs of customers.
Small regional banks
Usually they are based on an individual approach to each client. But they are less willing to take risks, so there are frequent refusals in lending – usually prefer to work only with borrowers who have an account with this bank.
Transparent structure of ownership
The enterprise has a limited number of founders – individuals, between whom the relationship is fairly transparent (friends, relatives, etc.). In this case, the real owners of the company and the persons in the constituent documents must coincide. The head of the company is one of the founders, not an employee. The co-founder is the key contact person for the bank. Fully has all the information about the business, ready to build an open dialogue with the bank. The company has a production facility in the long-term lease, the availability of equipment (even in the ownership of the founders). A potential borrower is ready to provide the bank with a liquid and sufficient collateral. The company actively works with its current account, has a good credit history. Profitability of business, enough funds to fulfill short-term obligations.
A large share of own funds in the liabilities of the company’s balance sheet
To whom the bank will not issue a loan
When applying to a bank, no one can be sure beforehand of a positive decision. But some businessmen do not have to count on getting a loan for business at all, including companies that work in the service sector for less than 3 months, and in industry – less than 6. Also, the bank can refuse if the money goes to finance the production or supply of weapons or military equipment, as well as for the production of alcohol and tobacco products.