Among the forms of loans for business customers, lending by credit limit is an optimal and popular product trusted by many businesses. So what is lending by credit limit? Is this the optimal solution for businesses? Let's learn more about this form with SeABank.
1. General information about credit line loans for businesses.
What is a line of credit loan?
According to the provisions of Article 27 of Circular 39/2016/TT-NHNN, amended by Point b and Point c, Clause 10, Article 1 of Circular 06/2023/TT-NHNN as follows: Line of credit is a form of lending in which the Bank/Credit Institution will coordinate with the customer to establish a maximum loan amount within a certain period of time. At least once a year, the credit limit and maintenance period will be reviewed and adjusted.
Credit organizations will review the loan balance annually
Characteristics of credit limit lending
Some characteristics of credit limit loans that businesses need to understand before deciding to borrow are as follows:
- Businesses only need to prepare a loan application to use within a certain loan period (maximum 12 months).
- Flexible disbursement method: Can be disbursed each time within the limit ensuring the total outstanding debt at any time does not exceed the approved limit.
- Interest calculation method is beneficial for businesses: The characteristic of this form is that the amount of money disbursed will be calculated on that amount, not on the initially approved limit (except in the case where the business disburses 100% of the limit).
- Prepayment fee: Since the maximum loan term is 12 months, the prepayment fee for this option is almost free.
Advantages when businesses borrow according to credit limits
- Enterprises can proactively use loan capital.
- When there is a need for a loan, the ability to learn and access the business is very fast because the purpose of the loan is clear.
- Interest rates are clear and specific, depending on the disbursed amount, not on the approved limit, so you will save on monthly interest payments.
- Simple and quick procedure: Businesses only need to complete the application once and can withdraw capital many times.
Flexible interest calculation method based on disbursed amount
2. Conditions for businesses to borrow according to credit limit and notes.
Loan conditions according to credit limit.
Some conditions that businesses need to understand when borrowing according to credit limits are as follows:
- Have a business line that is suitable for the purpose of borrowing capital for the business plan.
- Possible loan options.
- Have sufficient collateral to guarantee the loan value according to bank regulations.
- Full financial records and guaranteed ability to repay principal and interest.
- Good and reputable credit history.
Basic and quick loan conditions.
What to note when borrowing according to credit limit:
When borrowing according to the business credit limit, the following issues should be noted:
- Clearly identify loan needs: Businesses need to determine the loan amount and whether the loan purpose is suitable for the maximum loan term of 12 months or not.
- The maximum loan term is 12 months, so when customers disburse one or more times, they need to calculate the loan maturity plan and have a contingency plan if the bank refuses to approve the loan next year or grants a lower limit.
- Use loan capital for the right purpose as agreed with the bank, have a reasonable capital usage plan and have a plan to ensure business efficiency and debt repayment ability.
- Read the terms of the contract carefully and calculate the collateral option suitable for the loan package.
- Finally, to build credibility with the bank, the most basic thing is to pay principal and interest on time. This is also a deciding factor in whether the bank will approve the business for a credit limit next year or not.
3. Be confident in borrowing capital according to the credit limit at SeABank
The characteristic of this product is that once a year the bank will review and evaluate the business to decide whether to continue granting the business a credit limit or not? Therefore, to help businesses feel secure in borrowing capital, SeABank has provided the following solution: “Unblocking capital sources for businesses when borrowing credit limits at SeABank".
Businesses choose to borrow according to credit limit at SeABank
Loan conditions
Corporate customers are legal entities or individual customers who are owners of private enterprises borrowing capital to serve the business activities of private enterprises that meet the loan conditions according to SeABank's regulations and the law.
Some basic loan documents for businesses are as follows:
- Legal documents
- Loan plan profile
- Financial Profile
- Collateral Profile
Loan process at SeABank
Step 1: Business Determine loan needs and prepare documents.
Step 2: SeABank receives documents and assesses legal capacity, credit relationship reputation, business activities and financial situation of customers, collateral and credit needs, effectiveness and feasibility of credit granting plan.
Step 3: If the application is approved, the related contracts will be prepared: Credit contract, guarantee contract, debt acknowledgment contract.
Step 4: Proceed to sign credit and collateral documents.
Step 5: Complete loan security procedures and warehouse collateral assets according to regulations. Disburse to Customers
Step 6: During the process of the enterprise using the credit limit, SeABank will conduct post-credit checks (periodically or suddenly) to ensure compliance with the terms of the contract.
4. Conclusion.
Choosing to borrow capital according to the credit limit for Enterprises at SeABank, you will be served by a team of experienced and capable specialists. With the current lending policy, SeABank is always the choice trusted by Enterprises. For all information about the product, you can contact SeABank at the website or Hotline 1900.599.952 (KHDN) and SeABank Branches/Transaction Offices nationwide.
