History knows many companies that were able to expand their activities and acquire their current status largely thanks to the long-term financing received from the bank for Investment Business loan
Viola Funding Limited offers long-term financing of large projects with an initiator’s contribution of up to 10%.
We finance the following industries:
• Energy sector and renewable energy sources.
• Heavy industry and mechanical engineering.
• Chemical industry and processing of chemical waste.
• Infrastructure and transport, including seaports and terminals.
• Agriculture and food industry.
• Real estate and tourism.
In addition to working capital loans, which are used by many entrepreneurs, investment business loans are an important tool for financing companies.
From a financial point of view, an business loan is one of the most attractive options for young companies.
Contact Viola Funding Limited to learn more about our offerings.
Investment business loan explained
To finance large projects, banks sometimes offer syndicated loans.
An investment loan is a bank loan for financing projects implemented by a borrower, the purpose of which is the construction, restoration and modernization of fixed assets, as well as the acquisition of intangible assets, the purchase of shares or long-term securities.
This means that an entrepreneur who receives an investment loan must use the money received in this way for the purposes agreed with the bank.
Requirements for obtaining Investment Business loan is a positive result of the financial analysis of the investment carried out by the bank.
The loan amount can be transferred to the borrowing company immediately or can be provided in tranches. In the latter case, the receipt of each subsequent tranche usually depends on the fulfillment of the borrower’s obligations under the previous phases.
How to secure a business loan?
Credit scoring in investment lending is a complex system of algorithms and financial indicators used to evaluate the borrower’s creditworthiness, as well as the risk of possible problems with debt repayment in the future.
An investment loan is always a business-specific tool. This means that a one-time check of the current financial health of the borrowing company and its financial history is not enough. Experts must carefully analyze the activities of the borrower in order to make the right decision.
In the case of large loans with a long maturity, banks always use advanced tools, including the so-called credit scoring.
During application for Investment Business loan, borrowers must have the following documentation prepared:
• Reports confirming the financial health of the company.
• Statutory documents, etc.
• Documents from the national court register.
• Detailed, professional and sound business plan.
The above requirements will apply to any investment business loan.
Investment Business loan can be used for the following:
• Any other assets for the production of goods or the provision of services.
• Real estate and land owned by the borrowing company.
• Equipment used to conduct business.
With much emphasis on loan, you can buy shares of other companies or bonds. It is important to note that some banks provide businesses with the opportunity to take out one investment loan instead of another loan.
Finally, your company must demonstrate financial success by growing dynamically and consistently. So the bank guarantees timely debt repayment.
Investment loans conditions and interest rates
Taking even more risk by providing loans to an entrepreneur who cannot afford to pay 10-20% of the project cost is highly unlikely.
An important condition to obtain investment business loan, an initial contribution of the borrowing company is almost always required.
What is the interest rate and general financial conditions of an investment loan for a business?
In most cases, the cost of the loan will consist of the standard loan processing fee and interest.
It all depends on the conditions contained in a particular loan agreement.
Interest rates on investment loans vary widely. It depends on the economy, the situation in the host country, the industry and the specific project.
In the current market conditions, the issuance of investment loans entails a greater risk for banks than before. This means that the bank can, for example, offer a lower interest rate, but this will shorten the loan maturity.
What to look for when choosing a business investment loan?
A loan is a debt that an entrepreneur will pay off for years.
For this reason, you should carefully study the terms of the loan. Apart from the interest rate (for example, EURIBOR and margin), experts highlight other elements that need to be checked.
Fees and steps to consider when choosing an investment business loan
• Loan activation fee.
• Loan application fee.
• Credit insurance.
Some of these costs are fixed. Banks usually offer different fees. For example, some institutions do not charge an application processing fee.
Bank margin is negotiable. Thus, the client can negotiate a lower cost of the loan. The amount of margin is calculated by banks by determining the credit risk and financial health of the company.
The totality of this sections explained the concept of investment business loan, how to get it, or if your company should choose another financial product:
• The success of negotiations with banks largely depends on the current financial performance of the company and a well-written business plan.
• The method of repayment of the loan depends on the agreement with the bank.
• The initial contribution of the borrower is usually between 20 and 30%, although there are investment loans that cover up to 90% of the project cost.
• An investment loan is provided for a period of 1 to 20 years.
Before taking out a loan, you should check other financial instruments such as leasing.
Viola Funding Limited is ready to meet your business needs.
We help finance large projects in Europe and beyond by providing investment business loans on favorable terms.
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Website:https://viola-funding.com/