Which loan to choose: commercial or bank
Posted: Tue Jan 07, 2025 10:03 am
A commercial loan is when one entrepreneur takes out a loan from another entrepreneur. In this situation, the subject of the loan is not money, but products or services. The banking institution is not involved in the transaction.
A bank loan is a transaction between an individual or legal entity and a bank. The company or owner borrows money from the bank and then pays back interest for using the loan funds.
In a commercial loan, the parties to the transaction new zealand telegram decide on the following points:
The cost of the loan (for example, interest, a certain amount, a batch of products, or even free of charge when a businessman wanted to help a partner).
In what form will the return be made (for example, a company takes raw materials and returns finished products).
Deadlines (participants can agree on any deadline).
The key rate of the Bank of Russia does not affect commercial credit. The parties to the transaction themselves decide what the terms will be. Entrepreneurs draw up a contract, write down the terms, and sign it. All this is on a legal basis.
Key benefits of a commercial loan:
the conditions are more favorable than the offers from the bank;
saving on interest;
do not use working capital;
saving time.
It is worth considering the risks: if the contract is drawn up incorrectly or if it is not carefully studied, you can get unfavorable conditions. If everything is clear and logical with banking institutions, then the practice is different with commercial loans. When drawing up a contract, you need to be extremely careful.
The company's reputation plays a big role. If the enterprise has proven itself, then the probability of receiving a commercial loan on favorable terms is much higher.
At the same time, banking institutions do not give out loans to every businessman who asks for them. If the organization has been operating for less than a year, the bank may refuse to issue money. A bad credit history is also a common reason for refusing to issue funds. The only help in such a situation is a commercial loan.
A bank loan is a transaction between an individual or legal entity and a bank. The company or owner borrows money from the bank and then pays back interest for using the loan funds.
In a commercial loan, the parties to the transaction new zealand telegram decide on the following points:
The cost of the loan (for example, interest, a certain amount, a batch of products, or even free of charge when a businessman wanted to help a partner).
In what form will the return be made (for example, a company takes raw materials and returns finished products).
Deadlines (participants can agree on any deadline).
The key rate of the Bank of Russia does not affect commercial credit. The parties to the transaction themselves decide what the terms will be. Entrepreneurs draw up a contract, write down the terms, and sign it. All this is on a legal basis.
Key benefits of a commercial loan:
the conditions are more favorable than the offers from the bank;
saving on interest;
do not use working capital;
saving time.
It is worth considering the risks: if the contract is drawn up incorrectly or if it is not carefully studied, you can get unfavorable conditions. If everything is clear and logical with banking institutions, then the practice is different with commercial loans. When drawing up a contract, you need to be extremely careful.
The company's reputation plays a big role. If the enterprise has proven itself, then the probability of receiving a commercial loan on favorable terms is much higher.
At the same time, banking institutions do not give out loans to every businessman who asks for them. If the organization has been operating for less than a year, the bank may refuse to issue money. A bad credit history is also a common reason for refusing to issue funds. The only help in such a situation is a commercial loan.