Buying And Selling Living Businesses
1. Loan conditions
Today, small and medium business owners tend to seek financial support services, such as loans, to promote business growth. The loans will help support capital needs quickly, allowing SMEs to save time, access new opportunities and develop a competitive advantage in the market. To be approved for a bank loan, businesses need to meet:
- The loan representative must be a person with full civil act capacity.
- The purpose of using the loan must be transparent, lawful and clear.
- The financial status of businesses is healthy, not too weak and able to pay both principal and interest.
- Enterprises with feasible business investment projects along with debt repayment plans must be realistic and low-risk.
- Enterprises must ensure that their assets are in accordance with the provisions of law.
2. Business loan documents
Business customers need to prepare the following loan documents:
2.1 Legal documents
- Business registration certificate or establishment license or investment certificate.
- Regulations of the enterprise.
- Decision to appoint the position of Director, Chief Accountant (if any).
- Identity card/Citizen identity card or passport, household registration book of the loan representative.
- The tax registration certificate
- Credit information reports typically include the following items:
- Company financial statements (for the last 2 years)
- Labor contract (if any).
Bank loan plan:
- Effective production and business plan to ensure the ability to repay bank loans.
- Bank loan repayment plan.
2.2 Assets as collateral for loans according to regulations
- Real estate: certificates of ownership of houses and land.
- Tangible assets: Cars, means of transport, goods, machinery, equipment, invoices, sales contracts.
- Valuable papers: stocks, bonds, capital contribution certificates, etc.
3. Things to note when applying for a bank loan
a) It is necessary to clearly define the conditions as well as the actual needs of the business
Businesses need to base on monthly and annual revenue to be able to determine a reasonable loan to ensure the ability to repay the bank as expected.
b) Understanding interest rates is a very important factor
Each loan package will have a completely different interest rate. For example, loans do not require collateral, so interest rates will be much higher than other forms of loans. In addition, each bank has a different way of calculating interest rates. Therefore, take the time to learn as well as carefully read the applicable terms. Especially in terms of interest rates and the arising, if any, to limit unnecessary risks. Some additional fees can be mentioned such as late payment penalty, early payment fee or contract renewal conditions
c) Choose a bank before borrowing
As well as choosing the right form of bank loan, you need to carefully study the terms that each bank offers before deciding to borrow. Not only that, you also have to consider the support you get when using that bank’s services. It is best to choose large, reputable banks because they have the loan packages you need and are supported with timely care.
d) Be careful when borrowing too much money from the bank
No matter how much you borrow, how much or how little, if you don’t repay the loan, the bank will evaluate it as bad debt. So you need to think and calculate carefully. You should only borrow an amount suitable and just enough to serve the purpose of your business. Absolutely avoid borrowing, causing unused balance but still incur interest minus the bank. This will very easily make you insolvent and into bad debt.
4. Consulting service on business purchase and sale procedures of Vietnam MVA Law
Lawyer MVA has many years of experience in the field of business purchase and sale, share transfer. When using the consulting service on business purchase and sale procedures at MVA, we will help businesses implement:
- Carry out inspection and review of legal procedures
- Support and advice to complete the profile and documents of the enterprise;
- Consulting, drafting business purchase and sale contracts
- Consulting on personal income tax, corporate income tax for the seller in the transaction;
- Support in handing over assets, documents and records of enterprises
- Consulting on business consolidation for the buyer after completing the transaction.
Service costs are what customers care about. But, don’t worry, because the price we offer is guaranteed to be suitable for each specific case. Helping you to save maximum costs when using our services. Please contact MVA immediately to be consulted by a senior expert, support all policies on services, products, and loan companies quickly, conscientiously and professionally.