Lending in the Russian Federation, and not only, can be divided into two areas: retail and lending to legal entities.
Retail lending is represented by the following products:
- Customer credit. This type of loan is characterized by the issuance of funds to individuals, employees, for consumer purposes (the acquisition of household and other equipment, the issuance of cash, credit cards, etc.).
- Car loans for individuals. This type of loan involves the issuance of funds to individuals for the purchase of vehicles. Basically, banks have a limitation - the inability to purchase special equipment in this way.
- Mortgage. Acquisition of residential or non-residential property on credit. It is characterized by significantly lower rates compared to other products, as well as long loan periods (about 10-25 years).
Types of loans in the Russian Federation for legal entities
Unlike retail lending, the product line for legal entities is much wider. Basically, the following types of loans to legal entities can be distinguished:
- Real estate lending. This type of loan allows legal entities to buy non-residential and residential real estate. The difference from mortgages for individuals is much shorter loan periods (5-10 years).
- Loan for the purchase of vehicles. Legal entities as well as entrepreneurs have the opportunity to purchase both cars and trucks, special vehicles.
- A loan for the purchase of equipment is the most popular among organizations. Technology does not stand still, so the emergence of new solutions in the manufacturing sector makes it possible to work more efficiently and efficiently. The purchase of such equipment for cash is not available to everyone. The opportunity comes to the rescue to buy it on credit. The main condition for lending for the purchase of equipment is the borrower's own contribution. Sometimes it can be from 20 to 50 percent of the loan amount. The term of such loans is not more than five years.
- Working capital loan . This is a short term type of loan. The purpose of this product is the replenishment of working capital (purchase of goods, raw materials, consumables, etc.).
- Overdraft is a short-term loan. A kind of loan without collateral for legal entities and entrepreneurs. The term of such a loan is one month. A prerequisite is to reset the overdraft every month and review the limit. Basically, banks set a limit depending on the volume of revolutions in the current account. In other words, an overdraft is the ability to go negative in the current account for a certain amount.
- Factoring as a type of loan began to be offered by bankers more recently. The role of factoring is to provide the company with cash if the company has sent the goods and there is no payment for it yet. The seller, on the basis of agreements concluded with the buyer, applies to the bank with a request for factoring. The bank considers the situation and offers to make a concession for the payment of goods from the seller to the bank. The bank pays the seller some value of the goods sold, and the buyer, in turn, pays off not with the seller, but with the bank. After final settlements with the buyer, the bank returns to the seller the rest of the money received for the goods. For this type of lending, the seller pays the bank some commission.