The investment lending program is organized with the help of state support and is aimed at providing financial assistance to small and medium-sized businesses in order to qualitatively develop any production. Almost all investment loans carried out state banks and are a long-term form of lending.
An investment loan is a special banking service which is carried out in order to improve production activities, expanding their own business, as well as for the implementation of any projects of small and medium-sized businesses.
Most often, this service is provided credit organizations in a long-term form and can be used for special lending of commodity purchases, as well as the formation of various production assets.
All this will significantly improve the activity of any production, as well as implement new projects of our own business. That's why this program is very popular among borrowers who care about the quality development of the enterprise.
Most often, this service is used by manufacturing companies engaged in construction, agriculture, as well as developing various innovations to increase overall efficiency activities of the enterprise and obtaining additional sources of profit.
At the same time, at the moment, not only special joint-stock companies, but also individuals who are individual entrepreneurs can apply for a loan under a special program. This lending system has its own characteristics:
The investment lending system can be represented by several types:
Each of the types assumes the intended purpose of the investment loan and fully complies with the basic conditions for registration.
A special form of credit can be presented in the following variations:
A special credit system can be arranged for legal entities, as well as for officially registered individual entrepreneurs. At the same time, special attention is paid to the implementation of profitable activities of enterprises within a specified time. Additionally, a check is made on the presence of debts from the borrower for credit and tax obligations.
Additionally, there are requirements for the preparation of documentation:
A setting such as interest rate for an investment loan is determined on the basis of general term use of government loans, as well as the availability of collateral. Also, the total accrued rate can be "floating" with a detailed analysis of all the bank's existing risks. The total interest can be paid for the actual number of days the borrower uses the funds provided.
The detailed amount of the interest rate is fixed in the agreement of the credit institution on the basis of additional solution, which is fully consistent with the policy of issuing loans of this company. Some credit institutions provide for the accrual of additional interest for operating expenses, as well as total cost attraction of banking resources for the implementation of the lending procedure.
Modern market conditions require careful control of all processes related to business development. At the same time, additional investments are used to increase working capital.
To implement successful business projects, you can use the service of special lending on loyal terms. But it is necessary to foresee the payback of the project in advance - that is why banking institution requires you to think in detail about each item of an individual business plan.
The modern system of investment lending involves the competent development of small and medium-sized businesses. The funds received can be used for the purpose of qualitative modernization of any equipment operating in production, as well as for the implementation of specific projects that affect the efficiency of the enterprise.
Special investment loans to improve the efficiency of small businesses with a competent approach can significantly improve the economic parameters of any production.
There are many sources of financial support for individuals and entrepreneurs. Someone applies to a bank or an MFI (microfinance organization), it is convenient for someone to get a loan from investment company. What is this direction and how it differs from the others proposed - we will consider below.
Financial difficulties are solved in two ways. Own reserves are sought, which can be a permanent income or a pre-deferred part of the profits received, or the applicant applies for third-party funding. You can receive money in various ways, it all depends on several factors:
As for the last point, the methods differ here. Banks carefully select potential customers, therefore obtaining a loan by this method is accompanied by significant difficulties.
If a person (or an entrepreneur) cared enough about his financial affairs, carried out transactions without delay all the time, paid the required interest, the bank would be happy to cooperate with him. However, many citizens of the Russian Federation cannot say with certainty that their credit history is good enough to apply to a bank. What else can await a person with this method of financing?
To get a loan in banking, it is necessary to observe a number of formalities. Firstly, the applicant will be checked for his past financial life and current solvency. All previous credit events involving the person will be checked, as well as his reaction to complications. If there are entries of a negative nature - overdue payments, debts, etc., then the bank will treat the applicant with coolness.
Secondly, some obligatory things, like permanent employment and income in right size increase the applicant's chances of getting a loan. The bank calculates in advance the options under which a person will not be able to repay the loan. If the applicant works seasonally or his income is below a certain minimum, it makes no sense to count on receiving financial assistance.
It's easier to go the other way to get third-party funds. In this case, a less demanding MFI or a loan from an investment company will do.
The only downside to a relationship of this nature is the interest rate. By issuing small amounts, companies are insured at the expense of high interest from no return. True, the requirements for the applicant here are minimal.
There are many more undeniable advantages:
The list can be long enough. However, there is another significant point that can be attributed to the negative. The amounts manipulated by MFIs often do not exceed several tens of thousands. There are companies that give out large amounts, but they have to use collateral.
In other respects, receiving financial assistance from MFIs looks promising, especially in relation to credit history. Often citizens resort to the following: they take and repay small loans in order to create positive records in their credit history. Consider another way of obtaining a cash loan, which has the parameters of both of the above methods, and takes mostly the best features.
Many companies are making various financial efforts to increase their own cash flows. Investing in various projects, including co-financing, is quite a profitable undertaking. Large and small investment funds offer lending on terms almost identical to those offered by MFIs, while:
It is convenient for companies to invest their own money in lending, especially when it comes to investing in small businesses. Sole proprietors can borrow large sums, leaving their real estate as collateral, or arrange loans under the guarantee of their own business.
Investment companies are not bound by the regulations of banks, therefore they can offer profitable terms while remaining in abundance. An individual approach to each appeal allows investors to attract more and more new customers.
What needs to be done to get a loan from an investment company? You can refer to the global network to find relevant portals that collect and disseminate information about such investment projects. In such a place, it is easier to compare the proposed product according to certain parameters:
The amounts manipulated by investors are large enough to cover the need not only for private applications, but also for requests from individual entrepreneurs. Small business receives support, and the investor - the opportunity to earn on their capital.
When to get financial assistance, several factors need to be considered. If a person is not in a hurry and can wait a few days, then you should contact the bank, where they will conduct appropriate checks on his solvency and provide him with a loan.
If this appeal fails, you should not be upset, because going to an MFI or to investors is the same usual way to find finance. At the same time, one should not forget about the rate set by microlenders and the rather small amounts that they manipulate.
When it comes to a stable deal with good characteristics, you can pay attention to investors. Many companies operating in the financial market offer their services on fairly loyal terms. Getting a loan from an investment company sometimes looks like the most profitable event.
For more than 10 years, Sberbank of Russia has been involved in financing long-term investment projects in all industries Russian economy, being the market leader in terms of the amount of financing provided, in terms of the degree of industry and product diversification.
The Bank has accumulated extensive experience both in terms of providing classic investment lending and project financing services, and in terms of implementing non-standard complex financial products.
Lending is carried out in the form of a one-time loan or by opening a credit line both within the limits set for the enterprise and on the basis of consideration of individual investment projects.
The loan can be provided in rubles or in foreign currency for up to 10-15 years under various forms of security.
With more detailed information on financing contracts for the import of capital goods and services at the expense of foreign banks under the cover of an export credit agency.
Evgeny Malyar
bsadsensedynamick
#
Business loans
Since the basis for issuing a loan is a business project, the bank actually shares potential risks with the borrower.
Article navigation
Probably every business owner has ideas about how to increase profits. Implementation large-scale project requires investment. The most common solution to this problem involves external lending. Investment loans pursue the main goal - bringing the enterprise to a new level of development. An article about their essence, features, shortcomings, who can access a loan for investment purposes and how to get it.
An investment loan is a special type of banking product, characterized in that the person applying for it has a well-developed project for the use of borrowed funds.
An investment loan has special features:
The project should include three main sections:
Based on the nature of the intended use of the loan, it is determined that it belongs to one of the three main types.
Designed to expand the scale of an existing enterprise. Tasks solved by the company with the help of an expansionary investment loan:
The peculiarity of its receipt is that until the debt is repaid, the effect of the improvement financial indicators enterprises should not be calculated. All the additional profit brought by modernization (and in some cases a large amount) will go to settlements with the bank.
When applying for an expansion loan, forecasts are based on the most pessimistic scenarios for the development of further events. Ultimately, only the bankruptcy of an enterprise can hinder the fulfillment of the payment schedule. If it is assessed as probable, the loan will simply not be issued. In the best case, the interest will be set at the maximum level.
Bank risks in this type of investment lending are initially the highest. Project lending provides for the development of one of the directions, separate from the main activity carried out by the enterprise at the time of application. The leaders of the company acting as a probable debtor hope to significantly increase the profitability of the business after the implementation of the plan.
Financing investment projects is always an adventurous business. The bank's income is formed only by the profitability of the new direction. The credited enterprise simply will not be able to fulfill its obligations under the contract if the project does not give the expected effect.
An enterprise can apply to a bank with an application for a construction and investment loan only after it has incurred certain and considerable costs. This feature is due to the specifics of the activity for the construction of real estate. Negotiations are possible if the prospective developer already owns the relevant piece of land or has issued a long-term lease on it.
In addition to the areas, the applicant will have to present design and estimate documentation, the development of which costs a lot of money. Of course, a building permit is required.
The probability of refusal when applying for a construction and investment loan is low, but it is available only to enterprises with high financial potential. The decision on approval and conditions is made by the bank based on the type of facility being built and an assessment (again, pessimistic) of its likely profitability.
The standard criteria by which a bank makes ordinary financial borrowing are in this case supplemented by some specific requirements.
Investment loans for small businesses are often a way to reach a medium or even high level of business activity, but it is not easy to overcome the boundaries separating an individual entrepreneur from an LLC.
Since we are not talking about small amounts in this case, the need for a clear and convincing business plan that reveals the purpose of the project comes first. In addition, the following developments are needed:
The features of investment loans include a repayment period that almost never exceeds ten years. One should also take into account the cautious attitude of the bank to applications for project refinancing. If the debtor failed to pay off the primary loan, then the estimated profitability as a result did not live up to expectations. At least, that is the conclusion.
According to the source of financing, investment loans are represented by five main forms:
This brief table requires some explanation, indicating the specifics, advantages and disadvantages of each form of investment lending.
A bank investment loan is the most commonly practiced form of capital raising. Availability works in its favor first of all. As the name implies, it is provided to the borrower in commercial banks subject to the conditions described above.
In turn, it has several varieties, determined by the terms of contracts and other conditions:
Of these categories, only the concept of "underwriting" needs comments. It is similar to the bond form, but in this case, the creditor bank acts as the buyer of securities. Of course, only consistently high characteristics of issued bonds can induce such actions.
Investment lending by the development bank, that is, in fact, by the state, is made when the project is of priority importance for the country's economy. Conditions are usually preferential, but they still need to be earned. The objects of public investment are projects that meet high requirements, including:
In other words, if as a result of the implementation of the project in Russia the production of a product based on modern technology without harm to the environment, which is in demand in the domestic and foreign markets, is started, then one can count on state investment.
The requirements for foreign investors attracted as part of international investment are very high. However, there are several effective ways to interest foreign entrepreneurs in investing in domestic production. Among them are a favorable tax climate, highly qualified labor resources and other advantages of the Russian economy. The main "trump card" is a tempting project that promises high profits.
A synonym for the term "commodity form of investment" is the word "leasing". By providing an enterprise with a fixed asset on the basis of a financial lease, the lessor creates conditions for the growth of labor productivity, improving the quality and all indicators of the enterprise.
Leasing can be financial and operational, direct and reverse. This method of economic borrowing, and in fact, investment, deserves a separate detailed description.
Finally, the fifth and last method of attracting investment lending is the issuance (issue) of securities, namely, bonds that guarantee a stable income in the form of interest. In this they differ from shares, the value of which depends on stock quotes and the success of the financial performance of the issuing enterprise.
The advantage of issuing bonds for an enterprise is that the investment is made directly from the buyer of the security. The bank, before issuing a loan amount, must first find it, attracting depositors with interest on the deposit.
There are also difficulties. The main one is the search for those who want to buy bonds. This is not easy: each acquirer must be convinced that the project will be profitable.
We must immediately accept the fact that economical effect from the implementation of almost any project with one hundred percent accuracy and reliability, it is impossible to predict. This, however, does not mean the meaninglessness of the very preparation of a business plan. The maturity and interest of an investment loan always depend on how convincing the applicant's arguments are.
A common method used by banks is to draw analogies between design parameters and the known characteristics of existing counterparts. If the introduction of some equipment brought a certain enterprise a monthly additional income, for example, at 100 thousand rubles, and all other conditions (location, form of ownership, turnover, etc.) are approximately equivalent, then we can assume the same effect after the investment.
Another forecasting method is based on the calculation of the ROI. Its disadvantage is in direct proportion to the difficulties associated with determining the expected profit. The calculation formula is as follows:
Where:
ROI- indicator of return on investment;
VP- gross revenue for the conditional reporting period;
VD- gross cost for the conditional reporting period;
VI- the amount of investment.
Everything is clear here: the ROI indicator shows how much profit each ruble invested in the project brings. Questions arise later.
Gross revenue VD is formed by the unit price of the product and the sales quantity. If an entrepreneur who wants to receive an investment loan claims that he will sell each copy at a price of, for example, 100 rubles, and its cost will be 60 rubles, then it may make sense for him to believe. Doubts arise when determining the market capacity, which can be determined by conducting large-scale marketing research or experimentally, that is, after the fact.
The slowdown in sales leads to a decrease in the capital turnover ratio, and, as a result, to a deterioration in real financial indicators in comparison with the planned values. Based on this, banks, as a rule, reduce their forecasts to a reasonably pessimistic level when establishing a payback period and profitability. Accordingly, these indicators affect the term of the contract and the interest rate.
After the commissioning of a new technological line, the Rassvet enterprise will introduce to the market New Product"Dewdrop".
Rassvet has its own funds in the amount of 2 million 400 thousand rubles, and intends to spend this money on the purchase of this equipment.
The required amount of investment credit is 19 million 600 thousand rubles.
The business plan states that with these characteristics, the monthly income will be:
Using the tax calculator, you can calculate that with expenses for:
the amount of monthly profit remaining for business development after taxes will be 629,651 thousand rubles.
The payback period of the investment To will be:
Table of contents [Show]
Investment lending- a banking service, a loan that can be used to improve existing production, expand business, as well as to implement new projects. The popularity of this form of loan is growing day by day: borrowers are bribed relatively low interest and long term repayment (banks are ready to wait until the company reaches the break-even point - the loan term can exceed 10 years), the creditors themselves - the risk-free transaction, because if the company turns out to be uncompetitive, the bank can take away its property and sell it at auction, returning the borrowed amount in full or at least at least most of it ( fixed assets transferred to the bank until the project starts to be implemented). Investment lending is most often resorted to by manufacturing companies (construction, Agriculture, innovation) - for them, this is the most affordable and cheapest way to increase efficiency by upgrading equipment. There are no restrictions on the organizational and legal form and other features - at present, not only joint-stock companies, but also individual entrepreneurs and even ordinary citizens who dream of their own business.
Investment lending is one of the elements of government support for small and medium-sized businesses, so almost all loans are financed by state banks (including Russian bank Development and Vnesheconombank). For commercial banks, such long-term lending is simply unprofitable (and many of them are not at all able to pull it off). Investment lending has a number of features:
There are several types of investment loans: In the first case (project), a loan is taken to implement a completely new project, the calculation of the profitability of which is made with an eye to the need to pay monthly payments. Expansion loans are needed by enterprises that have been operating for more than a year - with its help they solve the problems of expanding, opening branches, and modernizing equipment. Credit for construction organizations stands out as a separate type, since in order to obtain it, the borrower needs to provide more documents (for example, a permit for construction work).
Investment financing may have a large number of forms, each of which is further divided into subspecies. Schematically, this can be represented as follows: In detail, we consider only bank loans, as entrepreneurs most often deal with them. The simplest form is a one-time loan. The bank transfers the agreed amount to the personal account of the enterprise and takes a monthly percentage from the entrepreneur. At the same time, the borrower can repay in different ways:
A credit line is a less popular, but much more profitable form. The bottom line is that the borrower does not use credit funds all the time, but receives the necessary amount when he needs it. An analogue of a credit line is a simple credit bank card. Credit lines are also different:
underwriting- a method of lending, when funds are transferred to the client by repurchasing bond issues for which the borrower is the issuer. As a rule, only those securities, which have a floating rate that is in correlation with monetary metals, such as gold. Separately, it is necessary to note leasing - a fairly new phenomenon for Russian market. Leasing- a form of lease of equipment that can be redeemed at the end of the lease period. Leasing is especially recommended for young companies that have not yet settled on the market: if the business turns out to be inefficient, the leased equipment can be returned. The purchased machines will have to be sold, and quite cheaply - it is likely that the unfortunate entrepreneur will be left with large debts.
As already mentioned, the requirements for an investment loan borrower are somewhat different than for a simple borrower. Required:
To determine the terms of investment lending, banks use the same formulas. For example, the loan term is calculated using the following formula: Ci = Cp + Pp + Pk, where in turn Pk = K / (Pr + A). In this formula, Cp is the project implementation period, Pp is Grace period, Pk - loan repayment period. In the second formula, K is the amount of the loan (together with interest), Pr is the annual amount of profit that will be directed to repay the debt, A is the annual amount of depreciation. The bank assesses the effectiveness of the investment project by the following indicators:
PV = ∑n (Pk / (1+r) ^ n) This formula contains the following values: Pk – annual income, n – investment period, r – discount rate.
PI = PV / ∑n IC, where IC is the amount of initial investment. This indicator shows how much income there is per unit invested funds. The decision to issue a loan is made if the RI is greater than zero, therefore, the project is profitable.
PP = ∑n IC / Pl, where Pl is the average income over the years. Based on this formula, the term of the loan is also determined.
In addition to those documents that have already been described, in order to obtain an investment loan, you need: 1. An application for receiving a sum of money. 2. Constituent documents of the company (for example, charter). 3. Permission to conduct activities (relevant for construction). 4. Copies of passports of the head and chief accountant, labor contract concluded with the head, as well as a protocol on the appointment of the head to the position. 5. Financial statements firms over the past few years. 6. Certificate of registration of the company. This package of documents is basic. Banks may also impose individual requirements on the borrower.
Today, financial institutions offer several types of loans. The most common of these is a loan for investment purposes. This is a loan given individuals and companies on long term. The funds go to the development of production, the implementation of projects for the reconstruction of equipment, that is, the improvement of activities.
Investment loans are loans issued by banks to individuals and legal entities for the implementation of a certain investment program. With its help, the company solves the following tasks:
Important! The credit method of financing investment projects is an opportunity not only to expand existing activities, but also to reshape them.
Use of the loan investment activity in their work they can afford:
That is, everyone has the right to receive such a loan.
Such investment operations of credit institutions are very risky, because the allocation of funds for future business is carried out based only on the borrowers' assumptions and their vision of the future. This has led to the fact that banks put forward high requirements for potential borrowers. At the same time, the interest on investment loans is significantly higher compared to conventional lending. The main steps for a borrower to obtain a loan:
The use of credit and investment activities of banks implies the fulfillment of the following conditions:
A loan for investment purposes is issued only after the lender makes a positive decision, which is preceded by a thorough check of the borrower. AT general view the list of conditions looks like this:
Important! An investment loan is the attraction of funds for purposes that contribute to the improvement of the company's activities. A long period of time is needed in order for the organization to fully implement its intended changes and start making a profit. Banks often help entrepreneurs by offering optimal lending conditions and advice on how to spend money wisely.
Understand investment credit: what is impossible without determining investment ratings. This is an opinion regarding the borrower's creditworthiness to meet its loan obligations. The opinion is based on an international comparative basis and consists of:
A credit rating is an opinion that demonstrates the scope of its use. Yes, there are ratings. financial stability insurance, counterparty ratings for various transactions, credit ratings of companies and states.
This is the ability of the debtor to fulfill its credit obligations in comparison with the same criteria for other enterprises in the industry. The only difference from the international rating is that the comparison takes place in a separate country, taking into account all the risks of doing business in it. On a national scale, the ratings are based on the analysis of credit risks of large borrowers, including the government, within the same state. Eventually:
Important! The most common organization that forms international investment and credit ratings is Stan-dard & Poor's. Forms ratings either for the entire company, or for a specific step (issue of bonds, implementation of a large project, etc.).
Consider investment processes and their impact on loans. The investment process is called the activity to increase the national capital on the part of the participants in the reproduction process. It directly affects the dynamics economic system. These processes directly affect both the creditworthiness of borrowers and the ability of banks to issue loans. Let's highlight the factors that affect the possibility of obtaining an investment loan:
Within the framework of economic factors, there are tax burden companies; underdevelopment and low reliability banking system, high energy prices; inflation. Investment activities and processes are also adversely affected by the stratification of the population, low level life, the absence of a significant layer of the middle class, corruption, increased criminalization. All this negatively affects the national and international investment credit. Considering legal factors, we single out:
What positively affects the investment process and, accordingly, the process of issuing an investment loan:
Important! Joint-stock legislation regulating the investment activities of credit institutions directs their work to stock market. This contributes to the growth of the money supply and increases the ability of the bank to issue an investment loan.
Investment loans are loans for the implementation of a specific purpose, issued for a long period. With their help financial institutions actively participate in strengthening the economic system, because loan will go to improve production (as well as either its creation or expansion, etc.). Thus, a loan for investment purposes is an investment in the country's economy and its improvement.
The management of most enterprises is clearly aware of the need to modernize production, but not all of them have enough funds for its full implementation. When it is not possible to reach a new level of profit by introducing innovations and updating production facilities using our own resources, investment can help. lending. This is the best solution for enterprises that need to improve product quality and reorganize production.
How banking product for legal entities, an investment loan is a long-term targeted loan issued for a specific investment program. The transaction amount for this type of loan can amount to hundreds of millions of rubles, and this circumstance naturally led to distinctive features investment loan:
Investment loan It is provided, as a rule, to the following categories of borrowers:
An investment loan allows an enterprise to solve most of the important tasks that require additional financing. Among them:
It should be noted that for a bank type of lending is considered quite risky, since in this case, in fact, there is financing future business, based only on prospects. Based on this, credit institutions impose rather stringent requirements on potential borrowers, and the cost of borrowed funds is often more expensive than with conventional lending.
So, investment credit- This is a long-term targeted loan for a large amount, so a bank needs a good reason for issuing it. Most often, the first step of the borrower is the preparation and submission to the bank of an investment program (the so-called feasibility study), which clearly indicates the purpose of financing, the estimated timing of the project and the expected end result. In addition, to obtain an investment loan, an extended set of documents is required, which, among other things, includes a business plan and financial statements the borrowing company Last year. Among the general prerequisites for obtaining this type business finance in Russian banks, the following should be noted:
Before making a positive decision, the lender must study in detail the information about each individual borrower, after which the loan is issued for individual conditions, which depend on the financial and economic parameters of the project being financed. In the most generalized form, the list of these conditions is as follows.
You should be aware that in the vast majority of cases, an investment loan is issued for a sufficiently long period so that the enterprise can fully implement the planned changes and achieve the intended results. At the same time, banks often meet entrepreneurs halfway, providing the opportunity to choose the optimal conditions for this type of business lending, as well as real assistance in the proper use of borrowed funds.
Investment lending is not identical to long-term, although it also involves a longer period of use of credit resources, in contrast to short-term loans to replenish working capital.
First of all, investment lending is characterized by the presence of a financed project, new or already existing, for the implementation or development of which the credit resources attracted by the borrowing enterprise are directed. At the same time, the investor bank actually assumes part of the risks associated with the implementation of the funded project. And the result of the decision made in favor of lending to the project, respectively, depends on the income planned from the implementation of the project. Thus, the current financial condition enterprises, the amount of profit, the dynamics of growth of indicators, stability, creditworthiness, solvency of the enterprise, but the investment project itself is also of no small importance. When lending an investment project, special attention is paid to the predicted result, to the planned "output" from the implementation of the project "into life".
At the same time, which is especially important for borrowers, the attraction of long-term resources does not reduce the limit of lending amounts for replenishment of working capital, that is, the borrowing enterprise has the opportunity to separately finance investment and current purposes.
Investment lending is traditionally divided into direct investment lending, project financing and financing of construction projects. Each direction deserves separate consideration.
Investment lending involves the injection of long-term (long-term) money into an enterprise, which is closest to the concept of long-term lending. This direction is less risky, since the actual performance of the enterprise for the analyzed period is taken into account, forecast indicators are built, including without taking into account the implementation of the project, since if the enterprise would continue to engage in current activities under the same circumstances and at the same time would pay the costs of investment loan. As a rule, re-equipment, renewal of fixed assets, acquisition of additional equipment, expansion of the vehicle fleet or fleet of equipment, acquisition and launch of another similar line of equipment, purchase of another store, and similar expansion of current activities are suitable for this direction. That is, the enterprise continues to move in the usual direction, or, if it opens a new direction, then only if it is possible to cover all the risks with the profit received from current activities.
Project financing is the area of lending where the risks of financing the project are partially assumed by the creditor bank, since it is supposed to finance a project that did not take place, and the calculation of the project's payback is based on the expected benefits from the project. Accordingly, the enterprise intends to settle with the creditor bank for the loan at the expense of the income received from the implementation of the project. To project finance include new self-sustaining lines of business of an existing enterprise, or the creation of a new enterprise, a new production. The creditor bank can even become a direct investor of the enterprise, that is, invest directly in its authorized capital, if it expects an increase cash flows companies in the future and, accordingly, profit from their investments.
Construction project financing is the provision of loans for the construction of residential, commercial and industrial facilities. Typically, the bank finances construction project if there is a ready-made package of the necessary initial permits for construction and installation works, approved design and estimate documentation, issued land plot(right of long-term lease or ownership). That is, bank financing is attracted at the investment stage of the project, when the preparatory stage of the project, design and other preparatory work, has already been carried out without the participation of the Bank. In this direction, the requirements for the share of investment by the borrowing enterprise in the implementation of the project of own funds are the highest. When considering the project, the economic effect of the proposed use of the space under construction is calculated, whether they will be leased or will be further implemented.
The main requirements for the bank to the borrower
Lending of investment projects requires a well-defined business plan, a feasibility study and, in fact, contracts (agreements, transactions) providing for the supply of purchased property, the implementation of the necessary work.
Certainly the borrower, either in individual cases the guarantor enterprise must have a stable financial position, be able to provide quality service and repay the loan in a timely manner.
The bank does not undertake the implementation, or rather the financing of the project, one hundred percent, the obligatory share of the borrower's investment of his own funds is required, which ranges from twenty to fifty percent of the total project cost. At the same time, it is possible to set off investments already made by the borrower at the project preparation stage, but the period for making such investments may be limited. For example, only the funds spent by the enterprise on the implementation of the project not earlier than in the last six months will be accepted for accounting as own investments.
Investment lending as well as other types bank lending assumes the presence of collateral, that is, loans are provided against liquid collateral.
When considering a project, the experience of the project initiator in the implementation of similar projects is taken into account. This factor is not decisive, but increases the likelihood of a positive decision of the bank to grant a loan.
AT without fail enterprises affiliated (interrelated) with the borrower are analyzed.
The basic conditions for investment lending are somewhat different from short-term loans:
Willingness to invest own funds in the project or document the investments made;
- monthly repayment percent (less often quarterly), but a slight delay in payments is also possible;
- loan term up to seven, in some cases up to ten years, especially if the borrower implements the project with state support. The payback period of investments should not exceed the loan period;
- the debt repayment schedule is agreed with the borrower and directly depends on the parameters of the financed project;
- collateral is required;
- a loan is provided both in rubles and in foreign currency (if, for example, imported equipment is purchased abroad);
- different modes of lending are acceptable depending on the specifics of the project;
- a loan can be provided to finance previously incurred costs or refinance existing debt to other credit institutions attracted to finance investment costs.
Risks of hidden lending for investment projects from short-term sources
In the case of attracting short-term loans with the expectation of a subsequent prolongation or “re-lending” (since “short” loans are easier to obtain, fewer documents, and so on) to finance long-term goals, the borrower runs the risk of not receiving a loan on the same terms in the future, or, even more dangerous, to be denied the next loan.
In the event that the goals of the enterprise correspond to the attracted investments, both in terms of quality and timing, the borrower receives a guaranteed invariability of lending conditions for the period of the project (provided that there are no force majeure circumstances). Also, the benefit for the borrower is to reduce the cost of collateral (especially requiring registration) for long-term loans. loan agreements compared to short-term ones, in which payment for registration of each encumbrance is required. In addition, in the long term investment lending organizational costs, labor and time costs for collecting documents for processing and prolonging short-term loans are reduced.
