Business loans. Lending to small and medium businesses

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Financial investments are required to open a new business. Many entrepreneurs turn to banks for this. They offer various programs to start their own business. The registration procedure is quite lengthy, and for it you need to collect a lot of papers. SME loans will be the best choice if you do not have your own financial investments.

Terms of receipt

Loan processing in many organizations is similar. Lending to small and medium businesses is provided under the following conditions:

1. The company must be legally registered so that it has all the documents.
2. Banks are required to provide a business plan for the enterprise. At the interview, you will have to talk about your vision of business development.
3. Specialists of credit institutions perform their calculations on the stability of the company, so you need to provide the necessary information, reporting, forecasts.
4. Lending to small and medium-sized businesses is provided with the presence of property in the property.
5. Checking the reliability of the client. If a loan is issued to an individual entrepreneur, the borrower is checked as an individual. Credit history must bepositive.
6. The presence of guarantors and co-borrowers increases the chance of approval of a loan application.
7. Insurance in many banks is considered a mandatory service.

Only under such conditions is it likely that the application will be approved. When a positive decision is made, the standard registration procedure begins.

Types of loan products

Lending to small and medium businesses is divided into the following types:

• target;
• non-targeted.

Targeted loans are used for specific purposes, which are prescribed in the contract. For example, for the purchase of building materials. When payment to the counterparty is made, the expenses are confirmed with the help of documents. These can be copies of contracts, shipping documents.

Non-purpose loans are issued for any purpose. After receiving them, the obligation of stable payment of payments appears, and the client does not need to report on expenses. Interest rates on non-targeted loans are usually higher compared to targeted loans.

Programs

Each SME lending program has its own design features. You can get acquainted with them at the bank branch or with the help of a consultant. Programs of the following banks are currently offered:

• Sberbank. The product is called "Business Start". It is possible to obtain loans without collateral, but guarantors and a down payment are needed. The rate is 17-18%, and the amount is from 100 thousand rubles to 3million Loan period is 6-36 months.
• Rosbank. Up to 40 million rubles are issued for a maximum of 5 years. The rate is 12-16.5%. You need to pay a one-time fee and provide the property of the company as collateral.
• Transcapitalbank. The institution offers to arrange various business programs: for development, targeted lending, leasing, factoring. Rates start at 15%, and the amount is up to 30 million rubles.
• "VTB 24". The Bank offers a working loan, business mortgage, working capital. The rates are from 9%, and the amount is from 850 thousand rubles. The loan period is up to 120 months.
• Alfa-Bank. Loans are issued up to 3 years. The maximum is 6 million rubles at 15%. The bank does not require collateral. For consideration of the application, you must pay 2% of the cost of the loan.

Sberbank registration procedure

First, you need to apply to a bank for lending to small, medium-sized businesses. Many people in our country turn to Sberbank. Then you need to register with the tax as an individual entrepreneur. It is important to familiarize yourself with the franchising programs that are partners of Sberbank. You need to choose the right franchise.

According to your program, you need to create a business plan: draw up a marketing plan, determine a place for the office and solve other issues. Then it is required to collect documentation for obtaining a loan: passport, TIN, IP certificate, business plan. They apply with them. Funds should be prepared (30% for the first payment). Aftera positive decision, a contract is drawn up. Sberbank usually approves applications if the client has chosen a partner franchise.

Funds work

Many entrepreneurs turn to the SME lending fund. They act as guarantors for obtaining loans to start their own business. An entrepreneur needs to apply for a loan from a bank, notifying him of the desire to support a state organization.

Then the bank reviews the application, taking into account all the details. With a positive decision, a tripartite agreement is drawn up. Often, a small percentage is taken to facilitate lending to small and medium-sized businesses. Many banks work according to this scheme, but not all.

Advice for borrowers

When concluding a deal, you should read the contract so that there are no further disputes. You should immediately ask questions of a specialist. If the business is profitable, it is advisable to pay off the loan ahead of schedule, since most of the interest is included in the first months of payments.

Borrowers should consider the following nuances:

1. Such loans are issued at fairly high interest rates. Therefore, if it is possible to do without them, then it is better not to issue such cash loans. But if this still fails, then you should carefully approach the procedure for applying for a loan.
2. In order for the bank's decision to be positive, you need to create a unique business plan. From it it will be immediately clear whether funds are needed,and how profits will be distributed.
3. The business reputation of the owner of any business also plays an important role. Therefore, it is necessary to provide accounting documentation to increase the chances of obtaining a loan. All papers must be written correctly.
4. The bank must provide a business plan, which will spell out all the details of business organization. If he is promising, then the application is usually approved.

Lending to small and medium businesses is a big risk for banks. If the firm goes bankrupt, the financial institution may lose funds. Therefore, it is usually required to provide documentation on the availability of property, as well as guarantors, co-borrowers. Only with full compliance with the requirements is it possible to approve a loan for business development.