Money for the company: the corporate loan. Whether it is an investment project or bridging temporary financial bottlenecks – sooner or later every company will need a loan.
This is where the so-called company loan or company loan comes into play; it differs in terms of terms, amount of loan and usage. We will tell you which requirements you have to meet in order for the bank to grant your company a loan and what you should pay attention to when concluding a loan contract.
Short Term Loans vs. long term loan
A rough distinction is made between corporate loans based on their term – short-term loan agreements are used primarily when it is only a matter of temporarily bridging financial bottlenecks, for example, because a customer does not pay or has canceled order or the short-term order situation falls short of expectations.
However, you should refrain from a current account credit at this point: it is unnecessary and disproportionately expensive even with the short term.
Investment loans, on the other hand, are loans with a medium-term to long-term term, they are used for expenses with increased capital requirements, such as the purchase of new technologies, the expansion of the vehicle fleet or the expansion of the company premises.
Note the requirements: not every company receives the credit!
What applies to lend to private individuals also applies to loans for companies: if the bank fears that it will not get its capital back, it will not lend any money. For existing companies, this means that the company’s financial situation must be disclosed, for example by means of tax assessments or business evaluations or balance sheets, by submitting account statements, contracts and statutes to determine any liabilities and obligations to third parties, or by an extract from the commercial register.
Business start-ups, on the other hand, are required to have a business plan – it must be well thought out, sincere and realistic. If the business idea is right, there should be nothing standing in the way of a loan for young entrepreneurs.
Before the loan agreement: compare offers
In any case, it makes sense to seek professional support when comparing credit for companies. It starts with obtaining and comparing the offers, which are as numerous as they are different in their terms. It is important that the comparison is serious, independent and non-binding. Another advantage: a large pool of financial partners, which guarantees that not only very pre-sorted offers are listed, but an actual search for corporate loans with favorable conditions takes place.
Before actually getting offers, however, there are a few basic considerations: in principle, your company loan must match your company in terms of term and loan amount. The repayment schedule must also be set individually. Depending on what suits your financial situation, a repayment-free framework makes sense, which grants up to 2 years of deferral of the repayment phase. A repayment pause makes sense, for example, if it is only likely from time X that profits can be generated, for example when founding a new company or changing the field of activity.
When taking out the company loan, make sure that special repayment rights are granted. Where possible, these are agreed either annually or as a one-off amount and can significantly reduce the total cost of the corporate loan. Also, consider in advance whether an annuity loan credit comparison for companies or a repayment loan makes sense to you.
You also have to decide whether the interest rate should be variable or fixed, if necessary with the help of a suitable loan calculator – if the interest rate is low, long-term fixed interest rates make sense, even if the lending bank can pay this at a premium.