There is truth in the expression “Money makes the world go round.” Even the largest companies on the planet need to borrow money every now and then in order to finance their activities. Companies usually borrow money for activities that range from simply starting a business to financing a massive expansion. When the time comes for you to take out a loan, here’s what you should know.
Commercial or business loans are those taken out by companies for various purposes that are part of their business processes. Traditionally, companies take out these loans from banks or other commercial lenders that are situated locally. However, there is a growing trend for businesses to get commercial loans from offshore or internationally-based lenders—which, in essence, turns the regular loans into international business loans.
As in any huge loan, commercial loans are usually in the millions of dollars. The lender usually needs collateral to be able to recoup losses in case the borrower defaults. The most popular type of collateral is real estate. If this is the case with you, then you need to prove that the value of the property you’re offering up as collateral is in the same ballpark as the loan.
Any individual who walks into a lender’s office and asks for a loan needs to prove that he has the capacity to pay for that loan. The same concept applies in local or international business loans. Lenders typically request for data on your company’s tax returns or income statements for the last several years to have a clear idea of your company’s financial health.
Other Money-Related Documents
Another thing you have to consider when applying for international business loans: does your current credit rating make you attractive to lenders? If your credit history is abysmal, don’t even think that you have a chance. This is why lenders usually ask for copies of your credit history, your profit-loss statements, and other relevant financial documents.
This is a relatively intangible factor, but that doesn’t make it any less important a factor to lenders all over the world. If you’re applying for international small business loans, for example, you can still prove that you know what you’re doing by presenting to the lender the plans that you have regarding the project that you need funding for. You should include profit projections for the project, if possible.
International business loans are regarded as the bread and butter of the business world, but getting one isn’t easy. Fortunately, there are companies that help broker agreements between borrowers and lenders, so ask for their help. For more information, check out ehow.com/info_8129225_commercial-loan.html.
Usual Requirements for International Business Loans