What Are the Best Tips for Getting Business Loans with Bad Credit?

Enterprise loans refer to a method of borrowing from banks or other financial institutions in accordance with prescribed interest rates and maturities for the purposes of production and operation. Corporate loans are mainly used for large-scale long-term investments such as the purchase and construction of fixed assets and technological transformation. At present corporate loans can be divided into: working capital loans, fixed asset loans, credit loans, secured loans, stock pledge loans, foreign exchange pledge loans, unit time deposit pledge loans, gold pledge loans, syndicated loans, bank acceptance bills, bank acceptance bills discount Discounting commercial acceptance bills, discounting buyers or negotiated interest-paying bills, domestic factoring with recourse, export tax refund account custody loans.

Corporate loan

Enterprise loans refer to a method of borrowing from banks or other financial institutions in accordance with prescribed interest rates and maturities for the purposes of production and operation. Corporate loans are mainly used for the purchase and construction of fixed assets,

Credit loans refer to the bank's

enterprise

1. In line with national industry and industry policies, it is not a small enterprise with high pollution and high energy consumption;

2. The company has a good reputation in various commercial banks and has no bad credit history;

3. Approved and registered by the administrative department for industry and commerce and qualified for annual inspection

   Company Basic Information

   1. Business license, organization code certificate, account opening permit, tax registration certificate, company charter, capital verification report, loan card

   2. Annual reports for the last three years, financial statements for the last three months, and the company's public statements for the last six months

   3. Lease contract of the operation site and proof of rent payment, water and electricity bills for the past three months

   4. Various tax bills for the past six months, and signed sales and purchase contracts (if any)

   5. Proof of assets under the name of the enterprise

   personal information

   1. Borrower and spouse ID

   2. Property owner and spouse ID

   3. Account books of borrowers and property rights holders

   4. Marriage certificate of the borrower and property owner

   5. Proof of personal assets, such as real estate, cars, stocks, bonds, etc.

   6. Individual bank flow in the past six months or one year

   Working capital loans can be divided into

   1. The borrower submits a loan application and submits relevant materials.

   2. Upon approval, the borrower and guarantor sign a loan contract and guarantee contract with the bank.

   3. After the bank has implemented the loan conditions, it will go through the loan procedures in accordance with the prescribed procedures and transfer the loan.

   Basic knowledge of interest calculation

   (1) The interest rate conversion formula for RMB business is (Note: deposit and loan are universal):

   1. Daily interest rate (%) = annual interest rate (%) ÷ 360 = monthly interest rate () ÷ 30

   2. Monthly interest rate () = annual interest rate (%) ÷ 12

   (2) Banks may use the cumulative interest method and the interest method to calculate interest.

   1. Accumulated interest calculation method accumulates the daily account balance based on the actual number of days, and calculates the interest by multiplying the accumulated number by the daily interest rate. The interest calculation formula is:

   Interest = cumulative interest-bearing products × daily interest rate, of which cumulative interest-bearing products = daily balance total.

   2. Interest-by-interest method calculates interest on a case-by-case basis according to a pre-determined interest-calculation formula. Interest = principal × interest rate × loan term. There are three specific:

   If the interest calculation period is the whole year (month), the interest calculation formula is:

   Interest = principal x years (months) x annual (months) interest rate

   If the interest accrual period has a whole year (month) and a fraction of days, the interest accrual formula is:

   Interest = principal x years (months) x annual (months) interest rate + principal x fractional days x daily interest rates

   At the same time, the bank can choose to convert the interest calculation period into actual days to calculate interest, that is, 365 days per year (366 days in a leap year), and each month is the actual number of days in the Gregorian calendar. The interest calculation formula is:

   Interest = principal x actual days x daily interest rate

   These three calculation formulas are essentially the same, but since the interest rate conversion only takes 360 days a year, when the actual interest rate is calculated, the year will take 365 days to calculate, and the results obtained will be slightly biased. Which formula is used specifically to calculate, the central bank has given financial institutions the right to make their own choices. Therefore, the parties and financial institutions can agree on this in the contract.

   (3) Compound interest: Compound interest means to add interest to interest at a certain rate. According to the provisions of the central bank, if the borrower fails to repay the interest within the time agreed in the contract, compound interest will be charged.

   (4) Penalty interest: The lender fails to repay the bank loan within the prescribed period, and the penalty interest on the defaulter according to the contract signed with the parties is called the bank penalty interest.

   (5) Overdue liquidated damages for loans: the nature is the same as penalties and penalties for the defaulting party.

   (6) Formulation and filing of interest calculation methods

   The national commercial bank legal person's calculation and settlement rules and the method of interest calculation for deposit and loan business shall be reported to the head office of the People's Bank of China and notified to customers; regional commercial banks and urban credit cooperatives shall be reported to the People s Bank of China branch, provincial capital (capital) cities The central branch records and informs the customers; the rural credit cooperative county federation legal person can formulate the calculation and settlement rules and interest calculation methods of the deposit and loan business according to the actual situation of the county rural credit cooperative, and report it to the People's Bank of China branch, the provincial capital (capital) city center Sub-branch for the record, and the rural credit cooperative legal person will inform the customer.

   (VII) Reference basis:

   1. "Regulations on the Management of RMB Interest Rates" Yinfa [1999] No. 77.

   2. "Circular of the People's Bank of China on Issues Concerning the Interest Rate of RMB Loans" Yinfa [2003] No. 251.

   3. Notice of the People's Bank of China on the Calculation and Settlement of Interest on RMB Deposits and Loans Yinfa [2005] No. 129.

   Loan bank

   The choice of bank loans by enterprises is the first step in saving interest. Some banks will implement the national regulations.

   (1) Strengthen the pre-loan investigation and evaluation. Compared with the issuance of real estate and other real estate mortgage loans, the pre-loan investigation of accounts receivable pledged loans involves a wide range of investigation tasks. Commercial banks must not only investigate the production and operation and credit status of loan companies, but also check the creditworthiness and strength of debtors of accounts receivable; not only must they verify the existence of accounts receivable, but also check whether accounts receivable can be transferred and pledged. Examine whether the contract price is normal and reasonable to ensure that the pledged price of the receivables is not unreasonably high; not only must we understand the assets and liabilities of the pledger and the debtor of the receivables, but also pay attention to the pledger's sales and fund collection Management measures and debt management level of debtors of accounts receivable.

   (2) Select qualified accounts receivable. The receivables used for pledge must meet certain conditions: the products under the receivables have been issued and accepted by the purchaser; the purchaser has strong funds and has no bad credit history; the purchaser confirms the receivables And promised to pay only to the seller in the designated special account of the loan bank; the due date of the receivables is earlier than the repayment date stipulated in the loan contract, etc.

   It should be noted that the following accounts receivable cannot be used to establish pledges and need to be removed from the total accounts receivable: one is the hedge account, that is, the loan company owes the debtor of the accounts receivable at the same time; the second is the age of over 90 Days of receivables; thirdly, all accounts receivable of debtors with poor credit quality; fourthly, defective accounts receivable; fifthly, laws and regulations clearly stipulate that (or restrict) the establishment of pledges Accounts receivable, such as hospitals, schools, parks, and other civil entities with public welfare properties, charge rights based on public welfare, and the land revenue of the government land reserve center should not be pledged.

   (3) Reasonably determine the loan pledge rate. The loan pledge rate is the ratio of the loan amount to the value of the pledged property. The loan pledge rate of accounts receivable usually depends on the quality of accounts receivable, which should generally be 60% ~ 80%. The quality of accounts receivable depends mainly on the credit rating of the debtor (owing enterprise) of the accounts receivable. The debtor's financial stability, no bad credit history, high loan pledge rate, and vice versa. At the same time, the determination of the loan pledge rate must also take into account the concentration of receivables. The higher the concentration, the worse the quality of the receivables and the greater the risk. When issuing loans to highly concentrated enterprises, the pledge rate must not exceed 20%, that is, the loan amount cannot exceed 20% of the accounts receivable.

   (4) Strict risk prevention measures are agreed in the loan contract and pledge contract. The main terms that need to be agreed include: first, the pledgor must not have any transfer or waiver of rights, otherwise the loan bank has the right to cancel it or to pay off debts and exercise pledge in advance; second, the pledger must notify the accounts receivable in writing The debtor, and obtained a written commitment letter from the debtor to the loan bank, stating that the accounts receivable are authentic and that the debtor will not have malicious acts that damage the pledge right during the pledge period. Or deposit, otherwise it will bear the liability for compensation. Third, if the pledger is not exercising its right, causing the pledge right to be damaged or likely to be damaged, the loan bank has the right to exercise it on behalf of the pledger, or the loan bank has the right to require the debt to be paid in advance. Or to exercise pledge rights; fourthly, to clear debts in advance or to exercise other pledge rights, such as abandonment of rights, cancellation of contracts, revocation or change, deterioration of rights management, and possible deterioration of finances.

   (5) Pay attention to post-loan management of corresponding accounts. A pledged account for receivables should be set up in a timely manner to strengthen the supervision and management of the repatriated funds receivables of enterprises and prevent the diverted funds from being used for other purposes. In the case that the main debt is not paid at maturity, it shall negotiate with the pledgor and the account receivable debtor as soon as possible, and take early action to realize the pledge.

   Wenzhou issued a policy on August 1, 2013. In the future, Wenzhou SMEs will receive no more than four banking financial institutions, and the host bank's loan to enterprises will in principle not be less than 50% of the total corporate loans.

   According to the "Guiding Opinions on Increasing the Credit Input of Banking Financial Institutions to Promote the Healthy Development of SMEs" issued by the Implementation Leading Group of the Wenzhou Financial Comprehensive Reform Pilot Zone, the problems of excessive credit, long-term credit, and remote credit in the banking industry in Wenzhou are prominent. The concentration of bank loans in one company raises corporate financing risks. Banking financial institutions in Wenzhou will implement a host bank system and control the number of corporate loan banks.

   Zhang Zhenyu, deputy secretary-general of Wenzhou Municipal Government and director of the Municipal Finance Office, said that many enterprises in Wenzhou had been in danger before, and many of them were "dead" by loans. Many banks lend to a company. Some companies get excessive bank loans and invest in disorderly places. When they have a profit, they encounter capital adjustments and control. There is an enterprise in Wenzhou with an output value of tens of millions, but more than 20 banks gave it loans, loans of several hundred million, and finally went on the road of no return.

   The reporter saw in this opinion that the sponsor system is implemented, that is to say, the bank financial institution that the company opens a basic settlement account for is the sponsor of the enterprise, and the loan to the enterprise by the sponsor is in principle no less than the corporate loan 50% of the total, or no less than 0.75 times the output value of the enterprise.

   The guidance also calls for controlling the number of corporate lending banks. The number of newly-added loan companies in the banking financial institutions receiving loans shall not exceed the following total: group companies may not exceed 6, medium-sized and above companies may not exceed 4, small and micro enterprises may not exceed 3, and syndicated cooperative loans between financial institutions Not subject to this restriction.

   Among them, the grant of loans to group companies, the establishment of "2 + 4" credit mechanism, that is, within the jurisdiction of large banks such as industrial, agricultural, medium, construction, and transportation of loans to group companies at the same time, not more than two; for the same group In principle, there are no more than 4 other banks (other than large banks) issuing loans to enterprises. Provide loans to medium-sized and above enterprises and establish a "1 + 3" credit mechanism, that is, large banks within their jurisdictions cannot issue loans to one enterprise at the same time; other banks (except large banks) that issue loans to the same medium-sized enterprise and above In principle, no more than three.

   In addition, the guidance will link new loans to the output value of enterprises and implement a reasonable ratio of corporate loans to output value. In principle, each banking financial institution shall not exceed 1.9 times the previous year s output value or 1.6 times the current year s output value for new corporate loans. If the balance of the loans issued to the company exceeds the above standards, it shall be negotiated with the enterprise or at the relevant local government Under the guidance of the department, the multiples were reduced year by year and recovered to within 1.6 times. For companies whose loan balance is less than 1.6 times the output value, the company has a loan demand, and the host bank should take responsibility and negotiate with the other three banks to help the company obtain the loan.