Currently, various forms of business financing and investment are available on the market, and loans are undoubtedly the most popular. There are a lot of types of loans – among them investment loans, revolving loans, lines and credit cards, loans for start-ups and loans secured by real estate. All of these products, however, share a basic feature: banks set high requirements for a potential customer, companies applying for such a loan often treat it with distrust, and lending them money for development as being at particular risk. The effect of this is a situation in which banks rarely and costly borrow money, usually on terms more favorable to themselves than for entrepreneurs to whom they provide financing. Therefore, there are more and more companies on the market that have taken advantage of loans and which are increasingly difficult to pay back.
Running your own business brings a lot of satisfaction, but it also has a lot of challenges. When we obtain financing for its development or day-to-day operations in a bank or para-bank institutions, a field of interest for our company may also be a consolidation loan . This solution is recommended in a situation where we already have more than one loan liability per company and we want to optimize its costs. The consolidation loan for companies in most cases means a lower installment and lower costs of servicing this product, as well as easier management of our finances due to the fact that we will transfer our debt to one, not several banks and parabanks. Let’s take a closer look at him.
Combination of company loans – a way to stabilize the financial situation of our business
So what to do in a situation where meeting our monthly commitments poses more and more problems and even threatens our financial liquidity? The consolidation of company loans is a tool that will effectively reduce the costs of servicing loans taken by us. It is possible in cases when repayment of loans borrowed for investments, development or simply ongoing money operations becomes troublesome – and in some cases even impossible. Failure to comply with the repayment schedule significantly affects our further credit standing and makes the selection of new banking products no longer an option. The combination of existing commitments into one – with a lower, easier to repay installment – allows you to master the usually quite difficult financial situation, and with a reasonable management of your funds and spending discipline, also a peaceful way out.
Let’s start from the basics and explain briefly what the credit consolidation mechanism itself is – whether corporate or individual. Consolidation of liabilities consists in paying off all our debts, based on various products: from cash loans, through installment loans, overdrafts and overdrafts, to credit cards. Payday loans popular among Poles are not always honored by banks, but by loan companies as much as possible. The resulting amount is divided into the number of months, or installments, during which we declare repayment of the new loan. The rule is simple: the longer the repayment period, the lower the individual installment. There is a catch, however – the extended repayment period enabling convenient payment of liabilities is also a higher total cost of our new loan. It is also worth adding that in the case of customers with good credit history and sufficient capacity, it is often possible to select an additional amount for their own needs. It is added to the amount of consolidation and increases our monthly installment proportionally.
One, lower installment and one repayment date makes it easier for every entrepreneur
A consolidation loan for a company is governed by the same rights as a similar service for individual clients, but it should be remembered that enterprises are usually treated a bit more severely than natural persons. This applies primarily to the number of documents that we must provide or the statements and applications that we must complete. Banks and loan companies that have a consolidation loan for companies in their possession , thoroughly check the credibility of their potential customers.
So what needs to be done for corporate loan consolidation to take place? First of all, it is necessary to find out about the credit standing of our company – how much we borrowed, for how long, from which bank or non-bank institution, how much is still to be repaid and what arrears we have. We also need to collect documents related to all these commitments, primarily loan agreements and repayment schedules.
You must be prepared to obtain, among others: an extract from CEIDG, certificates of non-arrears with contributions for retirement, social and health insurance and taxes (income and VAT, if we are VAT), PIT declarations for the previous tax year or statements from corporate accounts. The types of documents are closely related to the industry in which the company operates and the legal personality in which it operates. As you can guess, the owner of a sole proprietorship should expect faster proceedings and fewer required letters than members of a limited partnership or limited liability company.
Armed with all these receipts, we go to a bank or a para-bank branch, which offers us the most advantageous consolidation – a new loan constructed in such a way, which we can repay installments with no problem and on time. The employee will check our credit standing and condition. It is worth noting here that a consolidation loan for companies is much easier to obtain in non-bank institutions that do not apply such stringent assessment criteria as traditional banks. Having estimated our creditworthiness, the employee will start adding up the liabilities that we want to consolidate and combine into one lower installment. Further, the consolidation loan for companies is no different from the same product offered to individual customers: the existing liabilities are repaid, and the resulting amount becomes a new loan. The amount that arises in this way is divided by the number of months during which we will repay the new loan – as you can guess, the longer the repayment period, the lower the single installment. Extending the repayment period is the most effective way to reduce our monthly commitment, which also makes it easier to pay regularly. Not without significance is the fact that the consolidation loan for companies is also aimed at combining many installments, usually set for different days, into one, the payment of which we must remember only once a month. In the long run, such small steps and facilitations will help us organize and organize our financial situation.
Corporate loan consolidation – additional resources
What can the funds obtained in this way be used for? Of course, consolidation loans for companies can be used primarily to repay several company loans and convert them into one, but granted on more favorable terms. However, this is not the only function and advantage of this solution, because it also allows you to choose additional cash that you can spend on any purpose – be it to repay other liabilities, investments and development or simply ongoing operations. This amount will be added to the total loan amount and will be repaid in one installment with other consolidated loans.
Corporate loan consolidation – long-term solution, not ad hoc
A consolidation loan for companies can be a very good way to organize your company’s finances and go straight ahead if you can already see the first signs of trouble in this matter. As in the case of consolidation for natural persons, we must not forget, however, that this is not a product that will temporarily save our company, so that we can sink into debt even more. One lower installment will definitely help us deal with our commitments, but it should not put our vigilance down. A consolidation loan for companies should be a help for those entrepreneurs whose intention is to achieve stability and ensure good condition of the enterprise.