April 19, 2018

How to optimize your credit load

July 22, 2012    PracticeРаспечатать эту статью

How to optimize your credit load

Seven tips to owners of medium-sized businesses.

Work on structuring financing

Although the structuring and financing of a very complicated process, especially at first, but eventually it can help save considerably, to make payments more convenient and safe. It often happens that a customer goes to the bank for a loan for working capital, for example, a $ 500 thousand, and after discussion and analysis of the characteristics of the enterprise turns out that would be enough to replenish half of this amount. If companies have to pay in advance for supplies from other countries, this problem can be solved by calculating the credit form. If you need to bring equipment from overseas, will the use of trade finance expertise under the customs guarantee. In addition, the tax now takes on the bank guarantees refund of VAT. When working with a decrease in accounts receivable factoring is connected, and the procurement of equipment at home – leasing.

Relate time

Optimally, if the loan term corresponds to the period of the project investment. The recent crisis has once again confirmed that it was too risky to take a short term loan for the project, despite the marked difference in the amount of bets – on short-term loan rates are much lower. Reporting to the bank customer will still be clear that not all the money has been directed to working capital, as formally stated in the loan. Besides, now the banks are much more likely to provide long-term money in connection with the improvement in liquidity.

Transparency business

Pay attention to the preservation of clear and transparent legal structure of business. Many medium-sized businesses owned not one but several firms, creating a holding structure. When banks consider the loan application, they request the data for all companies that belong to the owners and affiliated parties with them. Therefore, it would be better if all these companies will be clean in financial terms, and ownership structure – not too confusing and opaque.

Currency Loan

At a high level of business dependence on exchange rate fluctuations should be very careful in managing the credit load. Such dependence is typical for companies working with the export or import – the dynamics of the euro, dollar or other currencies can strongly influence their activity. Think long and hard over the choice of loan currency. For example, many companies that most of the costs and raw materials are in the currency revenues received in the national currency. During the 2008 crisis, companies that have dollar-denominated loans were compelled because of the growth rates of the U.S. currency greatly increase the cost of UAH, including service-related foreign currency borrowings. Companies that have managed to quickly attract new money in hryvnias and to prepay dollar debts, were in a safer situation.

It is necessary to take into account the experience in our uncertain times. In order to change course in time to be able to react, the company is important not to reach the maximum level of debt, which is unlikely subsequent bank lending, and to maintain a sufficiently large balances in their accounts. The optimum ratio is net debt / EBITDA is not higher than 3.5, although much depends on the scope of the company.

Explain the differences in official and administrative reporting

Be prepared to explain the variations in the financial statements of the enterprise from the accepted values ​​of the bank where you want to take the credit. In the explanations of the discrepancies can use management reporting, additional calculations and information. Almost all banks are willing to managers that the data management reporting can significantly, but within reason, differ from the official figures.

Serve the necessary documents on time

Over time, the crisis is a gradual change in the lending sector business and market sellers (lenders) is the market of buyers (borrowers). But, nevertheless, a bank can not pay attention to even minor omissions. Customers may delay filing, and bank account to request to bring the necessary documents, it can last for months.

This occurs because the borrower often want to be sure in advance that the time and effort spent on gathering the documents they are not wasted, and he will give credit. But it’s still wrong approach – there is no prior consent of the bank guarantees are not for anyone, either for the bank or the borrower, nor a broker for the loan if he is involved in the process. So if you really need a loan company, you need to stop doubting and start acting. The normal persistence client will serve as an informal indicator of its positive future success.

Keep compliance commitments

Each bank expects that after receiving the loan the borrower will be honest and punctual service to submit the documents specified in the loan agreement. Even if the payment is made in a timely manner, the bank’s important to have information on the expenditure of allocated funds. If the money is used for other purposes specified in the contract, the trust may be lost even to regular customers. The probability that a bank in a difficult time to meet the borrower will be able to grow, if honesty and interest in long-term cooperation will be present on both sides.

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