WHAT QUALIFICATIONS NEEDED TO BE LOANS
– Don’t know which bank to borrow at?
– Do you need advice on loan procedures and documents?
– You need money but don’t have time to go through the procedure!
1. Current status
Small and medium-sized enterprises often account for a high proportion of the total number of enterprises in the country, contributing up to 40% of GDP annually and employing 50% of the force of the entire domestic economy.
However, it is a fact that many businesses are having difficulty in accessing loans from banks. The main reason may come from the fact that the business is small, so the experience and management capacity is limited, there are not enough assets to mortgage or the business has not met the conditions for a bank loan. However, the role of capital for small and medium enterprises is extremely important. If enterprises cannot access capital, there is a risk of stopping production and business, and business strategies and plans will also be delayed.
2. To be approved for a business loan, you need to have
In this article, MVA will help you understand the requirements of the bank in the loan application, creating a premise for easy access to capital.
2.1 Good credit history
One of the conditions for a successful bank loan business is the reputation of the borrower and guarantor based on the history of debt payment. In Vietnam, banks will refer to credit reports from the National Credit Information Center (CIC) to check this information. CIC is the only unit in Vietnam authorized by the State Bank to collect credit information of individuals and businesses.
2.2 The purpose of a business loan is clear
The most important factor when applying for a business loan is that businesses must understand what their loan purpose is. Enterprises should clearly list their loan goals, such as needing capital to purchase fixed assets, expand business scale or solve problems of purchasing raw materials for production, etc. In addition, Enterprises should prepare relevant documents and specific business development strategies. These things help prove that your company is eligible for a bank loan.
2.3 Ability to pay debt
When reviewing loan applications for small and medium-sized enterprises, banks also consider the debt payment ability of enterprises. Accordingly, the bank will consider requesting more information about the supporting cash flow and debt repayment commitment of the business. If a business can demonstrate its ability to make payments on time and can manage unexpected expenses, it will easily build trust and get a loan approved quickly. Therefore, businesses should prepare financial statements and related documents when borrowing capital.
The business’s collateral will prove to the bank that the loan will be more secure if anything goes wrong. Collateral can be real estate, equipment, production machinery, etc. However, this type of asset will vary depending on the type of loan product that the business registers. Currently, some banks have unsecured loan products for online businesses. This loan product helps small and medium enterprises reduce many risks and manage cash flow flexibly.
3. Businesses need to pay attention
3.1 Actual needs and conditions when borrowing
Banks will easily give business loans to businesses if your company clearly determines the amount of capital and reasonable loan needs. Therefore, businesses need to base on monthly or annual revenue to determine the correct amount of capital to borrow. At the same time, this will also help businesses to ensure their ability to repay debts as expected. Therefore, before taking out a loan, please determine the balance of the loan for the business, avoid excessive borrowing, which will cause a capital surplus but still have to pay interest to the bank.
3.2 Learn more about loan interest rates
Each bank will apply different interest rates for small and medium-sized business loans. At different time periods, banks will apply different interest rates. The longer the loan period, the higher the interest rate will be. The difference in interest rates between banks is not significant.
3.3 Choose the right loan package
Besides the difference in interest rates, the bank’s business lending services are also more or less different. Therefore, businesses should carefully study the loan packages of banks to choose the right loan package. Currently, to attract businesses to borrow capital, many banks offer loan incentive programs or application approval conditions that are much simpler than before.
The bank’s small and medium business loan packages are the driving force behind the growth of young businesses. In order to meet the conditions for banks to lend capital, businesses should have a process of preparing documents and studying a methodical business strategy. If there is a need for direct advice on the bank’s business loan packages, please contact MVA immediately for support.
Surely, after reading the article, your business has the answers: Is it difficult to get a bank loan? What should small and medium enterprises pay attention to when applying for a business loan? Or contact MVA’s bank loan support service immediately for full support, 24/7 service.