Business Lending Terms: List and Requirements

On this page we will see a number of corporate crediting requirements and conditions that you should be responsible for in order to receive a business loan. Under market economy, there are different structural units – legal entities in which employees and management staff carry out individual types of business. They are defined as companies and have different legal status – ET, EOOD, OOD, AD, SD, KD, regulated by the Commercial Law.

Companies, depending on the essential factors and criteria, can be classified into several types. For example, according to the size of the activity, the size of the capital, the volume of goods and services produced, the number of employees, they are micro, small, medium and large. The most common are corporate loans for working capital / current needs, raw materials, materials for investments / tangible fixed assets.

In order to work properly and efficiently to achieve their goals, all companies need financial resources and cash.

Often for a number of reasons of a different nature, companies need additional funding for a business idea or other type of financing, and corporate finance is a widespread way of securing the funds.

It is popular in our country, many banks and financial companies grant corporate loans, providing conditions and requirements.

They are specific to each creditor, determined individually depending on the economic situation in the country and the world, reflecting the policy and strategy of the respective financial institutions.

There are some common and fairly similar terms for corporate lending that we will turn your attention to so that when you download a loan it is profitable and successful to make your business stable and prosperous.

1. Turnover conditions

1. Turnover conditions

Corporate lending conditions related to the turnover, cash flow, solvency of the borrower, the amount of revenue for the previous year of the company, here are the financial results that can be seen from the annual tax returns, balance sheets and income statement.

A minimum amount of self-participation may be required. Firm lending must have a profitable business for the past 1-2 years. For example, a Business Credit Partner from Expressbank requires up to $ 3,000,000 annual sales. Some financial institutions provide loans for a start-up business, a business project or an idea – UniCredit, Cisco Credit.

2. Conditions relating to the amount of the loan

2. Conditions relating to the amount of the loan

Terms of loan size for corporate lending – it depends on the proven needs, the sources of repayment, the type and amount of the collateral.

Funding may be as a percentage of the market value of the collateral from 70 to 100% or in absolute value – UBB up to BGN 300 000 for working capital loans and up to BGN 500 000 for investments, Postbank up to BGN 800 000, FIBank – Business credit for working capital up to 100 000 leva, but can not exceed the average monthly sales revenues and others.

3. Collateral requirements

3. Collateral requirements

Terms of business related collateral . Loans must fulfill the intended purpose and be reimbursed under the individual repayment plan, which is an integral part of the contract. The collateral is intended to ensure that he secures the creditor in case the debtor stops performing his obligations.

The collateral must meet requirements, such as a mortgage on immovable property, movable property, tangible fixed assets, land plots, agricultural land, pledge on receivables, pledges on money, collateral, co-debtors, shares, securities, promissory notes and other permissible by law.

Collateral is a condition for full or limited liability.

First Investment Bank provides corporate loans provided that the collateral is a mortgage on real estate, a pledge on DTM or movable property; UniCredit – real and movable property, pledge on cash, receivables, securities; DSK – movable, real estate, cash, Postbank allows for guarantees from legal and natural persons, United Bulgarian Bank – free and secured, Expressbank – focuses on free negotiation with companies, equipment and cash deposits, Central Cooperative Bank – all eligible Law Securities, Cisco Credit – In addition to traditional collateral, personal or bank guarantees, and more. There are also many corporate loans without collateral .

4. Other Terms

  • Terms of business credit in relation to market presence – business history / how long the company operates, at least a year, two /, business development plan, strategy.
  • Business Loan Terms Related to Credit History , Tax and Insurance Duties, Net Credit File. For banks, these criteria are particularly significant, they form the image of companies as correct payers. There are financial companies that grant corporate loans to people with bad credit history and regardless of indebtedness, without income auditing – Leno, Credit Group, Cisco Credit, Viva Loan and others. However, keep in mind that a non-serviced credit may seriously impair your credit file.
  • Firm credit terms in relation to the length of the repayment term . Depending on it, they are long-term and short-term, paid within 5-10 years. UBB – from 24 to 60 months, Postbank up to 10 years, Expressbank from 24 to 120 months, CCB – up to 5 and over 5 years and others.