The range of services that banking institutions provide today is extremely diverse. Among the quite popular proposals related to lending to organizations, a special place is occupied by investment credit. It is a long-term loan that can be issued by manufacturing enterprises, individuals and legal entities, individual entrepreneurs. An investment loan can be directed to the implementation of business projects, invested in real estate, fixed assets or major repairs.
The indisputable advantage of this type of lending
is the opportunity provided to the company not to spend its own funds
on long-term investment, for example, such as the construction of a new production facility or the acquisition of premises that were previously rented. The company pays payments to the bank on an investment loan on a monthly basis in the amount corresponding to the planned cash flow. The terms of repayment of the loan and its amount, as well as the interest rate may vary significantly. It depends on the bank that provides the loan, on many circumstances and factors.
Investment loan - under what conditions can it be granted?
The main distinguishing feature of an investment loan is its mandatory focus
on re-profiling or expanding production, acquiring equipment, and implementing new production projects. An organization can receive it only if financial and legal reporting is provided, which could testify to the material stability of the enterprise. A prerequisite will be the preparation of documents on collateral.
As collateral, all of the available assets can be used - fixed assets, motor vehicles, real estate, goods produced by the enterprise. Also, the object of financing, production equipment, assets held by the enterprise, and state guarantee can be used directly as collateral. In order to get the required amount of money, the borrower will have to draw up a business plan confirming the purpose of the loan.
As additional security, the guarantee of the owner of the enterprise and receivables can be used. A credit institution positively assesses insurance of items that are provided as collateral.
Analyzing the above, we can conclude that an investment loan is the best solution to raise funds for the implementation of long-term projects. Of the positive aspects, it should also be noted the possibility of a return of funds not only at the expense of those that will be received from the implementation of the project, but also due to the total income from the activities of the company. This is an excellent prerequisite in order to be able to expand the enterprise, improve its business structure or bring a small enterprise to a higher level of activity.