Businesses need capital to expand their business? Borrowing from a bank is an effective solution that businesses can consider. However, to receive bank disbursement, businesses need to meet certain conditions. Let's follow the article below of SeABank and learn more about the conditions for businesses to borrow from banks.
Conditions for businesses to borrow bank loans
To better understand the conditions for businesses to borrow from banks, you need to understand the regulations for which businesses can and cannot borrow. Specifically as follows:
Meet loan requirements as prescribed by law.law
According to the provisions of the Law, enterprises will be able to borrow capital when meeting the following cases:
- An enterprise must be a legal entity with the capacity to act in civil law as prescribed by law. Or an individual from 18 years of age or older with full legal capacity as prescribed by law, or from 15 to under 18 years of age without losing or having limited legal capacity as prescribed by law.
- The loan request must be for legitimate purposes.
- There must be a feasible plan for using capital resources.
- Have sufficient financial capacity to repay the loan.
- In case a customer borrows capital at the interest rate specified in Clause 2, Article 13 of Circular No. 06/2023/TT-NHNN, the credit institution will assess that the customer has a clear, stable and healthy financial situation.
Businesses will be able to borrow capital when the loan is used legally.
In case the business cannot borrow capital from the bank
Besides the case above, enterprises will not be able to borrow capital from banks or credit institutions if they fall into the following cases:
1. Investing in prohibited fields as prescribed by the Investment Law.
2. Paying expenses or financial needs related to investment activities in prohibited investment and business fields as prescribed by the Investment Law and other prohibited activities as prescribed by law.
3. Purchase or use of goods and services in areas prohibited from investment and business as prescribed by the Investment Law.
4. Buy gold bars.
5. Pay off loans at the same credit institution, except for loans to pay interest during construction, and this interest cost is included in the total construction investment cost licensed according to the provisions of law.
6. Payment of foreign loans (except foreign loans through deferred payment of goods) or payment of loans at other credit institutions, except for cases of early repayment of loans that meet the following conditions:
a) The loan term does not exceed the remaining term of the current loan;
b) The loan has not been adjusted for repayment term.
7. Borrow to deposit money.
8. Payment of capital contributions, purchase, and transfer of capital contributions of companies or shares that are not listed or not traded on the stock market.
9. Paying capital contributions under capital contribution contracts or investment cooperation contracts to implement projects that do not meet the conditions for business as prescribed by law.
10. Financial compensation, except where the following conditions have been met:
a) The customer has contributed his/her own capital to pay for the business project costs, but these costs arise within 12 months from the time the credit institution considers the loan;
b) Expenses paid with customer capital and considered for loan by credit institutions to carry out business projects.
Enterprises are not allowed to borrow capital to convert into deposits.
What should businesses pay attention to when borrowing capital from banks?
In addition to the conditions for businesses to borrow capital from banks, you also need to pay attention to the following issues before choosing this financial solution for your business.
Before borrowing:
- Clearly define loan needs.
- Choose the right bank: Compare interest rates, fees, and loan terms from banks.
- Learn more about loan products.
- Prepare complete and accurate loan documents as required by the lending institution.
- Calculate debt repayment capacity, avoid borrowing too much capital compared to the business's debt repayment capacity.
When borrowing capital:
- Read the loan agreement and guarantee contract (if any) carefully.
- Use loan capital for the purpose previously registered with the bank.
- Monitor and pay debts on time to avoid high interest rates.
- Regularly update the financial situation and business operations to the bank, helping the bank assess the business's ability to repay debts.
In addition, businesses also need to pay attention to the following issues:
- Avoid borrowing from unreliable organizations.
- Avoid disclosing financial information to third parties.
- Before deciding whether to borrow from a bank or not, businesses should receive advice on issues related to this issue to make the most appropriate choice.
Businesses should choose reputable organizations and banks to borrow capital.
Where should businesses borrow bank capital?
Currently, there are many reputable banks in Vietnam providing loan services for businesses with competitive interest rates and quick procedures, notably Southeast Asia Commercial Joint Stock Bank (SeABank).
SeABank is a reputable bank with 30 years of experience in the banking and finance sector, providing a variety of loan packages for businesses with many outstanding advantages such as:
- Always update loan interest rates according to the market, ensuring the most competitive interest rates for businesses.
- Simple loan procedures, quick disbursement process.
- Diverse loan products, suitable for the specific production and business sectors of customers, meeting customers' borrowing needs.
- Accept a wide range of collateral with competitive loan to value ratios.
- Providing professional, dedicated customer care services and comprehensive financial solutions to meet the diverse needs of businesses.
Contact SeABank now for quick business loan support.
Conclude
In short, understanding the conditions for businesses to borrow from banks will help businesses shorten the approval time and disburse loans more quickly. Hopefully this article has helped you better understand the conditions for businesses to borrow from banks. In addition, you can also learn about business loan products at SeABank. With diverse loan products, competitive interest rates and simple procedures, SeABank is committed to providing businesses with the most optimal financial solutions. Please visit the website of SeABank or contact Hotline 1900.599.952 for free consultation and quick loan support.
