Real estate business loan

Any business, no matter small, medium or large, at any stage of its development requires additional capital investments. The most reasonable way to get investments from outside is to take out a bank loan. Here, commercial banks have numerous offers for both individual entrepreneurs and large corporate clients. Moreover, in order to obtain a loan on the most favorable terms, it is wiser to leave a deposit. In the form of commercial real estate, this will not only increase the loan amount, but also get it at a reasonable interest rate.

Characteristic features of lending secured by real estate

First of all, it is worth noting that it will be much more difficult to get a loan for an individual entrepreneur secured by real estate than for enterprises with a different form of ownership. And to be more precise, the possibility of lending largely depends on many factors, including the specifics of the business, its seasonality, and the period of activity. That is, at the initial stage, it will be problematic to get a loan even with collateral, for the reason that many banks are wary of cooperation with individual entrepreneurs.

In any case, obtaining a bank loan requires the provision of a certain package of documents. It must contain:

1. A license to carry out a particular type of activity.
2. Documents confirming the solvency of the enterprise, declarations 3-NDFL.
3. Authorized capital.
4. Registration certificate.

Of course, if we are talking about a loan secured by real estate, then the borrower will need a full package of documents for collateral. By the way, as for the subject of collateral, you can act as both commercial and residential facilities. For example, an individual entrepreneur, a representative of a small business, may well take a consumer loan for private clients secured by his existing housing. And, legal entities can take a loan secured by commercial real estate owned by the enterprise and its founders.

Please note that a loan for small and medium-sized businesses may or may not have a designated purpose, the main conditions for cooperation will depend on this.

General lending conditions for individual entrepreneurs and legal entities

Undoubtedly, each bank has a number of loan offers for small and medium-sized businesses and large corporate clients. However, all bank loans can be divided into several categories. First of all, banks issue targeted and non-targeted loans. A targeted loan can only be used to fulfill certain needs, for example, the purchase of commercial real estate, the purchase of equipment, the purchase of raw materials, the replenishment of working capital, the payment of contracts, and more. Non-purpose loans can be used to meet any needs of the enterprise, but it is not necessary to document their intended use.

Loans for individual entrepreneurs and legal entities are divided into two types according to urgency: long-term and short-term. Long-term contracts can be considered obligations for a period of more than 2 years. Short-term loans for a period of 2-3 months to 2 years are a more profitable option for cooperation for both the bank and the borrower. In addition, the shorter the term, the lower the interest rate, and the lower the risk of the bank and the borrower.

By the way, with regard to the annual percentage, this is a strictly individual issue. In fact, all financial institutions determine the interest rate for entrepreneurs on the basis of many indicators, the profitability of the business, the period of its activity, the credit history of the founder, and much more are taken into account. Therefore, for each individual borrower, the annual rate is determined by the bank's specialists individually.

Please note that when lending to business representatives with collateral, the liquidity of the property, its market value, the degree of wear and much more are taken into account.

Banking conditions

In fact, many commercial banks lend to small businesses secured by real estate. Popular financial institutions are Sberbank of Russia, Bank of Moscow, Rosselkhozbank, Rosbank, UniCredit Bank.

In Sberbank, representatives of small and medium-sized businesses, as well as corporate clients, can count on several loan programs secured by property. As for the terms of credit, they differ for all products, however, the average annual interest ranges from 15 to 20 points per year. Loan terms are flexible from several months to 10 years. The maximum amount is an individual matter, it depends on the lending program, the cost of the object, the income of the borrower or legal entity. The minimum amount is from 150 thousand rubles.

Among other things, Sberbank offers targeted programs secured by real estate for the implementation of certain purposes, the purchase of equipment, the purchase of real estate, or vehicles. For example, the program "Business Real Estate" allows you to take a loan from 150,000 rubles, for up to 10 years, with an interest rate of 14.74% per annum. The Business Invest program allows you to get a loan for up to 10 years with a minimum rate of 14.82 percent, and Express Mortgage allows you to purchase commercial real estate using bank funds with an interest rate of 15.5% for a period of 120 months.

VTB Bank of Moscow also offers several profitable lending programs for businessmen with collateral. Express loan "Kommersant" allows you to take a loan in the amount of up to 4 million rubles, at an annual interest rate of 21.99%. A “revolving” loan from VTB Bank Bank of Moscow provides an opportunity to issue a loan of up to 4 million rubles for a period of up to two years on individual terms. An "investment" loan allows you to get up to 4 million rubles for up to 7 years.

Please note that for each individual borrower, the annual percentage is determined individually, depending on many parameters.

Rosbank provides borrowers with a bank loan for the implementation of certain purposes, for example, renovation of premises, replenishment of working capital, purchase of cars, real estate or equipment. According to the terms of lending, the maximum loan amount reaches 60 million rubles, the interest rate is from 20.3 to 21.35% per year, the maximum period is up to 36 months. The main advantage of entrepreneurs from cooperation with the bank is that it provides a deferred payment for up to six months.

Unicredit Bank also has several programs for individual entrepreneurs and legal entities; there are both short-term and long-term loans, the maximum amount of which can reach 47 million rubles. The percentage is determined individually, the terms range from 1 to 10 years.

All methods of lending for legal entities and individual entrepreneurs

By the way, one cannot ignore the topic of which loan will be the most beneficial for the borrower. In fact, there are several lending options:

1. A bank express loan is a targeted and non-targeted loan, which is characterized by short contract terms and a high annual interest rate, as well as a quick decision.
2. Consumer credit for individuals, individual entrepreneurs secured by their housing. The advantages of the program are long-term lending and loyal interest rates.
3. Loan program for individual entrepreneurs for a short period with a high interest secured by commercial or residential real estate.
4. Private investment is not a bank loan, but one of the most relevant ways to raise capital, its essence lies in the fact that a secured loan is issued not by a bank, but by a private investor.

The process of applying for a bank loan

In fact, for private entrepreneurs and legal entities, bank lending is still the most reasonable way to attract investments, so it is worth considering this process more carefully. First of all, it should be taken into account that banks prefer commercial real estate as collateral, these are warehouses, offices, retail space, industrial premises. There are a number of requirements for the subject of collateral. First of all, it must be registered with Rosreestr, have high liquidity, no encumbrances on it and its good technical condition.

Please note that banks individually consider lending secured by purchased real estate. That is, the borrower, which is a legal entity or an individual entrepreneur, buys a property and leaves it as a pledge from the bank until the full payment of obligations. True, in this case, an initial payment of at least 20% of its value will be required.

So, the lending procedure looks quite simple, the borrower must submit an application to a financial institution, and attach to it a number of documents confirming his solvency and documents for collateral. By the way, the bank will require an assessment of the collateral by an independent expert, it can be prepared in advance, although many banks impose a number of requirements on independent appraisers and offer borrowers accredited specialists.

Further, the bank within a certain period of time consider the questionnaire and study the documents. Bank specialists inspect the collateral and make a decision on the borrower's application. In the case of a positive decision, the borrower and the lender sign an agreement and draw up an encumbrance on the collateral object in Rosreestr. That is, after signing the contract, the owner of the property does not have the right to make transactions with it.

By the way, do not forget that the collateral is subject to mandatory insurance at the expense of the borrower.

Thus, it will be much easier to take a loan for a business secured by real estate insofar as the bank has a guarantee of repayment of borrowed funds. But nevertheless, individual entrepreneurs and representatives of small businesses cannot always count on a positive decision and favorable conditions for cooperation, because at the initial stage, banks completely refuse to finance their entrepreneurial activities.