Today, banking organizations offer not only credit loans for the development of large businesses, but also full support for all financial activities of the enterprise. Taking into account the total amount of working capital owned by large companies, it is quite understandable that both sides want to maintain mutually beneficial partnership relations for a long time. Owners of large businesses can rely on an individual approach and loyal attitude to the requests.
Currently, there are a lot of various credit programs for owners of large firms, which can be both short-term and long-term. It is necessary to understand for what purposes some types of financing used to choose the most optimal option.
• Short-term financing
With this kind of investment, as a rule, a small amount is given. Their maturity is limited to two years. Such credit programs are considered some financial “quick help” for business. They issued quickly, but for such minimum requirements, it is necessary to overpay significantly.
• Long-term financing
Investment lending and business development loans offered to those borrowers who are interested in a long-term source of funding. This kind of credit calculated for up to 7 years. An essential feature of such financing is that, in addition to the complete package of documentation, it is required to provide a well-formed business plan to the banking organization.
Advantages and Disadvantages of Taking Small Business Loans from Banks
The loan is the most popular way to date to settle some financial difficulties. Short-term loans provide an opportunity to resolve current issues. Using long-term credit programs, you can run new projects. However, the main drawback of any lending remains its high cost. Also, it is required to collect a massive package of documents, and the timing of the loan application may take quite a long time.
When registering a credit, an individual commission determines the loan rate and the amount of funding, based on the information provided on the welfare of the borrower and further securing the loan in the form of a suretyship or collateral. The higher the risk of non-return of borrowed resources, the higher the percentage of overpayment and the less the amount of financing.