Ways to secure a business loan
When there is a shortage of cash for the development of the company, entrepreneurs often consider taking out a loan. This is often a good idea - the obtained finances allow you to move forward, and when you manage to choose a good loan, it may even turn out that its costs are not so frighteningly high. However, it is worth knowing that in order to obtain such support from banking institutions, you should take care of securing a company loan.
Securing a company loan - purpose
The loan is a repayable obligation - as you know, banks are not charitable institutions and they will want to recover the loans granted. Nothing for free - the amount of interest and commission is added to the liability amount. Therefore, before the entrepreneur obtains financial aid, he will be thoroughly assessed in terms of creditworthiness. Based on this analysis, the credit risk of a specific operation is assessed. If it exceeds a certain threshold, the bank may require collateral for a company loan.
Loan collateral is a guarantee that even if the borrower gets into trouble that prevents him from paying his debt, the bank will be able to recover at least part of it. The basic division of loan collateral allows for a distinction between personal and tangible collateral.
Personal loan security
Personal collateral for a company loan assumes that the liability will be the responsibility of the specific person providing the security. It may be the borrower himself, but it is also possible to involve another person. Such a person will be responsible for ensuring that the entire loan amount is repaid, plus the value of interest and commission.
For the person securing the loan personally, this means that he will be responsible with all his assets, both present and those obtained. Most often, new businesses are required to provide personal security for a loan.
The personal collaterals for the loan include, first of all:
- A promissory note,
- bill of exchange (aval),
- surety granted on the basis of the regulations contained in the Civil Code,
- Bank guarantees,
- transfer of debts,
- power of attorney,
- accession to a credit debt.
Tangible security for a company loan
As part of the tangible security for a company loan, liability is limited to the individual assets of the responsible person. In this case, it can also be the property of both the borrower and third parties.
The material security for the loan includes:
- general pledge,
- blocking funds on a bank account,
- misappropriation as security.