Supporting businesses in borrowing from banks and issues to note

Are you having financial difficulties and need to find capital to invest in expanding your business? Bank loans are an effective option to help you solve capital problems and promote business development. Let's learn more about the current forms of support for businesses to borrow bank loans in the detailed article of SeABank below.

Should businesses borrow from banks?

The decision to borrow should be made after careful consideration, ensuring that it accurately reflects the needs and capabilities of the business, while minimizing financial risk.

Specifically, businesses should borrow from banks in the following cases:

• Expanding business, investing in new projects: Borrowing capital helps businesses have more resources to carry out potential projects, promoting sales growth and profits.
• Improve financial status, capital turnover: Using borrowed capital properly helps businesses optimize cash flow, solve temporary financial problems and improve operational efficiency.
• Investing in new technology: Upgrading technology helps businesses increase productivity, reduce costs, and improve competitiveness in a volatile economic environment.
• Guaranteed debt repayment capacity: Enterprises need to have stable business operations, abundant income sources and collateral to meet the obligation to repay principal and interest.

Businesses should borrow capital from banks when they want to expand their business and improve their finances.

In addition, businesses should not borrow capital in the following cases:

• Financial difficulties: If a business is in financial difficulty and is uncertain about its ability to repay debt, borrowing may result in a high risk of default.
• High borrowing costs: High interest rates and other costs associated with borrowing can put financial pressure on a business, affecting profits and operations.
• Lack of transparency in the project: Enterprises need to have detailed and transparent plans on capital use purposes and investment projects to ensure efficiency and profitability.
• Market instability: Businesses need to be cautious when borrowing capital in the context of unpredictable market fluctuations and lack of prediction about future trends.

Businesses should not borrow capital when they are uncertain about their ability to repay.

Current business loan support packages

Currently, support packages for businesses borrowing from banks will be divided into many different types, typically short-term and long-term loan support packages. Specifically as follows:

Short term capital

Popular forms of short-term loans for businesses include:

Corporate Overdraft Loan

• Features: Accepts a wide variety ofCollateral, given a certain credit limit, businesses can withdraw money at any time during the loan term.
• Application: Solving sudden working capital needs for businesses, paying short-term expenses such as salaries, goods,...

Loan by credit limit

• Characteristics: Businesses are granted a credit limit for a certain period of time and can withdraw money multiple times within the limit and loan term.
• Application: Meet the regular working capital needs of businesses, pay periodic expenses,...

Short-term loans for each specific business plan

• Features: Designed to meet the short-term needs of each specific business plan.
• Application: As a source of investment capital, funding for new, specific business plans of the enterprise, helping to solve the sudden capital needs of the enterprise.

Trade finance

• Features: This product is suitable for export/import businesses. Helps businesses pay foreign suppliers or import goods. Trade finance has many forms such as L/C, T/T, D/P,...
• Application: Helps businesses increase competitiveness in the international market, expand import and export markets,...

Short-term loan packages are being considered and chosen by many businesses.

Long term capital

Popular forms of short-term loans for businesses include:

Project investment loans:

Characteristic:

• Used to implement new investment projects, projects requiring long-term capital from the enterprise.
• Loan interest rates are usually fixed or floating.
• Enterprises need collateral or guarantee from a credit institution.

Application:

• Invest in new projects, expand production and business scale.
• Upgrade and improve technology.

Loans for investment in fixed assets:

Characteristic:

• Used to purchase fixed assets such as factories, machinery, equipment,...
• Loan interest rates are usually fixed or floating.
• Enterprises need collateral or guarantee from a credit institution.

Application:

• Purchase of large value fixed assets to serve the production and business process.
• Improve production capacity, increase operating efficiency.
• Purchase of large value fixed assets to serve the production and business process.

Long-term loans are suitable if the business needs to invest in new projects.

Documents and procedures to support businesses to borrow capital from SeABank

Currently, SeABank is also providing many programs to support businesses in borrowing capital with competitive interest rates and simple procedures. Note that information on documents and procedures to support businesses in borrowing capital from SeABank may change over time and according to bank policies. Below is an overview of the basic factors that businesses may need to pay attention to when wanting to borrow capital from SeABank:

Conditions for businesses to borrow capital at SeABank

To be able to borrow capital at SeABank, businesses need to meet the following requirements:

• Reputable business, meeting debt status regulations: The enterprise operates legally, has full business registration documents and operating licenses in accordance with the law. Has a healthy financial situation and is able to repay loans as committed.
• Meet other regulations appropriate to each product and industry specific requirements as required by SeABank.

Businesses need to have sufficient legal documents to borrow capital at SeABank.

Documents required to apply for a loan

To borrow capital from SeABank, businesses need to prepare the following documents and records:

• Legal documents.
• Business plan profile.
• Financial records.
• TSBD profile.

Procedure for supporting businesses to borrow capital at SeABank

Below is the process of supporting businesses to borrow capital at SeABank that you can refer to:

• Step 1: Enterprises prepare complete documents as required by SeABank.
• Step 2: SeABank will conduct an appraisal of the business's loan application.
• Step 3: After the application is approved, the enterprise and SeABank will proceed with the procedures for receiving collateral and signing a Credit Contract, which clearly states the terms and commitments of the loan..
• Step 4: SeABank will disburse loans to businesses in accordance with the commitments in the Credit Contract.
• Step 5: SeABank will conduct post-loan checks to ensure that businesses use loan capital for the right purpose and effectively.

Notes for businesses when borrowing and using capital effectively

Below are some important notes that businesses need to consider when borrowing and using capital effectively:

What to note when businesses want to borrow capital from banks

Before deciding whether to borrow from a bank or not, businesses need to consider the following factors:

• Clearly define the purpose of the loan: Businesses need to clearly define the purpose of the loan to choose the appropriate form of loan.
• Assessment of debt repayment capacity: Businesses need to assess their ability to repay debt based on their current financial situation and future revenue forecasts.
• Compare interest rates and loan terms from different banks: Businesses should carefully research the interest rates and loan terms of different banks to choose the most optimal loan solution. Businesses should note that loan interest rates can change over time and depend on many factors.
• Find out about loans: Businesses need to carefully study loan information such as bank loan conditions, loan type, loan term, and requirements related to collateral. This helps businesses better prepare for the loan process and minimize risks. 

Businesses need to clearly define their purpose before wanting to borrow money from the bank.

In addition, businesses also need to note the following issues:

• Learn more about banks and loan products: Businesses should carefully research information about the bank and loan products they are interested in, including:loan interest rate, loan term, collateral, loan conditions,...
• Choose a reputable bank: Businesses should choose reputable banks with experience in business lending.
• Prepare complete loan application documents: Businesses need to pay attention to fully preparing loan documents according to the bank's requirements, this helps ensure the loan process is quick and smooth.
• Signing loan agreement: Before signing, businesses need to carefully read the loan agreement to understand the terms and conditions. Make sure that all of their rights and obligations are protected in the contract.
• Make sure that the loan process complies with the legal regulations on bank loans. In addition, consulting with an experienced lawyer or financial expert before signing a loan contract or guarantee contract is necessary to ensure the safety and transparency of the business.

Prepare complete documents to make the business loan process smoother.

Notes for effective use of loan capital

To use loan capital effectively, businesses need to note the following points:

• Make a specific plan for using the loan: After determining the purpose of the loan, the enterprise needs to make a specific plan for using the loan. This plan should include the following contents: loan amount, loan term, purpose of use, source of repayment, etc. A specific plan for using the loan will help the enterprise manage and use the loan more effectively.
• Implement the loan usage plan correctly: Enterprises need to properly implement the loan usage plan that has been established. Proper implementation of the plan will help enterprises ensure the efficiency of loan usage and debt repayment ability.
• Closely monitor and supervise the use of loan capital: Businesses need to closely monitor and supervise the use of borrowed capital. Close monitoring and supervision will help businesses promptly detect errors and make timely adjustments.
• Pay on time: Businesses need to repay their debts on time according to the loan contract, ensuring that they are not penalized for late repayment. Repaying debts on time will help businesses maintain their reputation with the bank, creating favorable conditions for borrowing capital in the future.

Businesses need to pay attention to planning the use of borrowed capital and repaying debts on time.

Conclude

Bank loans are a useful financial solution to help businesses expand their business and increase profits. However, businesses need to consider carefully and comply with regulations to ensure safety and efficiency. If you are looking for products to support businesses in borrowing capital, contact SeABank immediately for advice on the most suitable product. SeABank always accompanies businesses with diverse loan products, competitive interest rates and simple procedures. With a team of professional and experienced staff, SeABank will support businesses in choosing the most suitable loan solution for their needs and financial capacity.

To learn more about SeABank's business loan support services, please visit the website or contact Hotline 1900.555.587 (Customer Service) or 1900.599.952 (Business Service).