Small Business Loans – Specificity of the domestic economy is that the number of the majority of goods and services are just as small businesses . Although the volume of their transactions are not so significant as the revs large companies. But it is small businesses are the main guarantor of the existence of free competition and a market economy.
For a better understanding , to include representatives of small business firms that do not account for more than one hundred employees. Incl layer and private entrepreneurs.
Practice shows that this part of the business, not having sufficient resource base , most often refers to the banks for loans. The demand creates supply , but the conditions are not always sufficiently loyal.
True, there are some differences in the requirements of financial institutions to borrowers who are classified as ” small business .” Private entrepreneurs are usually credited in programs designed for individuals and small businesses – product -oriented entities . And today if you need a loan for your business, then loan center can help you with this.
New customers , banks offer mostly one-off loans and for regular , with a good reputation and appropriate credit history , the financial institution may open for a certain period of time, usually one year , the credit line . But regardless of the term of cooperation with the borrower , the bank will require the presence of collateral.
The main documents that are analyzed in the decision making process are the financial statements of the borrower , it is desirable for several years , which will trace the dynamics and stability of the company . Firms which only opened and want to get start-up capital is business development , will make it virtually impossible.
While each bank has the appropriate credit offers for small businesses, but in practice to get such a loan is not easy. Lender , analyzing all the information obtained from a potential client should assess all possible risks. And the riskiness of lending to such businesses is much higher than loaning large stable companies. Therefore, the proportion of refusals on applications for loans to small businesses is high.