9.3 billion USD, this is the amount released by the Business to finance 87 projects in France in 2016. That is, a growth of 6.9% compared to the previous year. In view of these figures, this is a record year for business loan loans. Notably thanks to the Juncker plan which has made it possible to reorient loans to the private sector, SMEs. Review of business loan loans.
Bad credit? Don’t worry we offer good online loans bad credit
In order to help people that have bad credit, ACFA has set up a loan scheme called: good online loans bad credit.
Accessible since 2008, this type of loan is particularly suitable for self-employed businesses with less than 250 employees, but also for medium-sized (self-employed) companies employing fewer than 3,000 people.
Business loan loans for SMEs can finance:
- Material investments (real estate, equipment …)
- Intangible investments (expenses related to research and development, filing or purchase of patents, creation or resumption of distribution networks …)
- A permanent increase in working capital, particularly in the case of a company in full development.
The amounts allocated by this type of loan can be up to 12.5 million USD. And the maximum cost of the project can not exceed 25 million USD. For the duration of the loan, it is between 2 and 12 years old.
In order to take out a business loan, entrepreneurs are invited to contact the intermediary commercial banks, who will decide whether or not to grant the credit.
The main advantages of the business loan:
- Extremely interesting rates
- Simplicity and flexibility of operations
- Creation of a leverage effect (one euro lent to the intermediary bank is equivalent to two USD lent to SMEs)
Both types of loans granted by the business loan
Also known as “direct loans”, individual loans are intended for European-wide investments generally above 25 million USD. They are negotiated between the business loan and the project promoters who are essentially private companies.
As a general rule, the loan period is approximately 4 to 20 years. The promoter may choose between a fixed, fixed and convertible fixed interest rate. In the latter case, the calculation of the rate is modifiable during the predefined duration. The repayment of the loan is in the form of semi-annual or annual payments.
The individual loan application to the business loan does not require any particular formality. All you need to do is send a request to the Bank Loans Directorate and provide the required documents.
Loans with bank intermediation
Intermediated loans are mainly granted to SMEs, midcaps and large companies through banks or financial institutions. These partner banks set the financing terms themselves (interest rate, loan term, deferred repayment, etc.). However, in principle, the period is 5 to 12 years. As for the total cost of the project, it can not exceed 25 million USD.
To apply for an intermediated loan, project promoters must submit their application directly to local partners inside or outside the European Union. Note that holding companies and industrial groups with more than 250 employees are excluded.
Eligible projects by the Business
In order to benefit from business loan financing, the Contractor must ensure that his project complies with the eligibility conditions of the business loan, that is, make a significant contribution to:
- the growth
- environmental sustainability
- regional cohesion
In one sentence, the project must be sound both economically and financially. However, there are activities that the business loan does not fund, such as the manufacture of ammunition, weapons, equipment or military or police infrastructure, activities not authorized by national legislation, projects with political or religious connotations etc.
How to apply for a loan to the business loan?
Once the conditions are respected, the promoters only have to provide the complete file so that the teams of the bank can examine it and approve it. Depending on the size of the project, the complexity of the operation, the procedure can take 6 to 18 months.
As a general rule, the business loan grants a maximum of 50% of the capital needed to carry out a project, without it being a newly created company. As a result, it is quite possible to associate business loan loans with those of other banks, even with non-repayable grants. It must be remembered that the business loan itself does not grant non-repayable aid and does not enter into any cooperation agreement.
The different loan instruments proposed by the business loan
The Business grants guarantees to a borrower implementing a project, the objective of which is in line with those of the European Union’s priority objectives. Indeed, this type of intervention allows the latter to raise its credit rating vis-à-vis the banks (during a bank loan) and financial markets (during a bond).
The financing of venture capital funds is particularly the responsibility of the European Investment Fund (EIF). Established in 1994, the EIF is a subsidiary of the business loan to provide equity capital to VSEs and SMEs. Thus, it acts as a strategic shareholder of venture capital funds or development capital of the recipient company. Beneficiary companies must be innovative and have a strong potential for development.
The Structured Finance Facility (MFS)
Providing financial support for priority projects is the principle of structured business loan financing. The profile of the beneficiaries thus presents higher risks than the one that the bank usually accepts. Areas encompassed include energy, technology, transportation, research and development, etc.
Thus, the intervention of the business loan is characterized by the combination of the following instruments: loans and senior guarantees including operational risks at the start and before the completion of the project, subordinated loans and guarantees of a higher rank than loans shareholders’ subordinates, mezzanine financing, derivative products related to the project. With the ability to finance operations worth $ 3.75 billion, the MFS is particularly profitable for large companies.