A business loan statement – is that a good idea?
The regulations imposed on banks cause the necessity to introduce restrictions in granting business loans. The provisions regarding the granting of cash business loans have been tightened considerably, which directly translated into tightening the rules of verifying the creditworthiness of clients applying for additional cash. First of all, popular business loans for the statement have been limited, at which formalities are reduced to an absolute minimum.
The effects are easy to predict. Although the business loan for the statement is still a desirable financial product for customers and attractive from their point of view, it is much easier to get it from private lenders than in a bank. What are the advantages and disadvantages of business loans granted for a statement? What should you pay attention to? What formalities should you expect? Before deciding to take advantage of such business loans, it is worth knowing the answers to questions related to the procedures for their granting.
Simplified formalities – the main advantage of business loans on the statement
The basic issue that makes it difficult to obtain a cash business loan is to examine the creditworthiness of a potential client. The process of testing the creditworthiness and credibility of the client is a mandatory procedure in the case of applying for a business loan from a bank. From the person applying for a business loan or business loan, the bank will request a certificate from the workplace about the amount of earnings and carefully analyze its credit history. So reliability and timely repayment of existing business loans. Customers who are trying to get a business loan from a bank where they have a personal account with regular remuneration for work are somewhat easier.
The bank then has a current view of all receipts and expenses in a given account. However, also in this case, a bank employee may ask for a certificate, especially if the receipts differ significantly in the following months. Although many business loan companies advertise their services by declaring business loans without first testing their creditworthiness, they usually do not expect any additional documents. Of course, in addition to a personal ID or other document allowing identification. This does not mean that they are not interested in the customer’s income at all.
Decisive questions – what can you expect when completing the application?
A minimum of formalities does not mean that there is no formalities. It is possible parabank employees that they will not request documents confirming the amount declared in the statement. However, they will certainly make their own assessment of the solvency of the client, which is usually included in the regulations for granting business loans. When completing the business loan application, you can expect questions about the type of employment, the amount of earnings or the amount of monthly charges. Including utility bills and possible other installments, the number of children and other persons living in the joint household, as well as the purpose for which the business loan is to be earmarked. This seemingly innocent set of questions is a discreet method of checking credibility and solvency. An application for such a business loan can be made on this page .
A good solution when the client wants time
A business loan for a statement with formalities reduced to a minimum is a good idea for people who do not have time to wait long for a credit decision. They can arrange everything as soon as possible, preferably on the spot. This is also a proposal for those who do not like to explain themselves to an employer and explain what they need a certificate of earnings. And then wait for his exposure. Customers who have several, sometimes irregular, sources of livelihood, are also willing to take advantage of this option, so they would not be able to provide such a certificate at all. It is definitely not worth a lie and fictitiously overstate the amount of your income. Sooner or later, this can come to light and certainly will not serve to assess the credibility of the client. In addition, some business loan companies reserve the option of contacting the employer by phone and confirming the declared remuneration. It is worth remembering that such actions on the part of the business loan company each time require the written consent of a potential borrower.
What is worth paying attention to?
Statement business loans have their advantages over defects that should be taken into account when making decisions. When deciding on a business loan from a parabank, it is worth getting acquainted with the regulations. It is necessary to pay attention to the amount of commission and interest. Due to the higher credit risk, the interest rate is usually higher than in the case of bank business loans. This is the price you pay for time saving and simplified procedures. It is good practice to reliably comply with the timely repayment of the business loan. Because in other cases, penalty interest may be repaid, and the parabank will implement debt collection procedures. At present, there are a dozen entities dynamically acquiring customers and tempting with numerous promotions on the non-bank business loan market. The offer is very diverse, so it is worth comparing several proposals from different companies and choosing the best one.
Who can borrow a statement?
It is worth considering what group of people is the most suitable for lenders. It is not a surprise that financial institutions prefer people with permanent employment, preferably on the basis of a contract of employment. Plus, it will be a long work experience, because thanks to this, even if you are dismissed, the client will have several months’ notice and will have the opportunity to receive a severance payment.