Investment loan is a long-term non-cash loan for companies, which is intended for launching new business projects or construction, for repair or purchase of real estate, for acquisition of fixed assets, as well as for purchase or repair of vehicles or equipment, as well as for other work related activities. The investment loan is available from 2 to 10 years, from 10,000 to 500,000 euros and can cover up to 90% of the total project cost.
How to determine the amount of loan?
The amount of the loan is determined by assessing the company, its performance, the loan investment plan, as well as the company’s risks and business plan. The interest rate of the loan is also determined on the basis of the company’s individual indicators, but in most cases it ranges from 2% to 5%, excluding variable interbank rates.
In the case of an investment loan, it is possible to choose a fixed or variable interest rate. Another factor that the borrower can choose is the type of payment schedule, ie the equal or decreasing payment schedule. Unlike factoring, an investment loan is a type of loan that is mainly denominated in euro and US dollar currencies with a floating or fixed interest rate. An investment loan requires collateral that can be served, for example, real estate, company capital or company assets, production facilities, vehicles or any other fixed assets, term deposits, and other types of collateral.
Few banks involved in issuing investment loans.
It should be noted that, in addition to the pledge, the lender may also ask for a guarantee from the business owner. State, local government or some other guarantee can often serve as security. Several banks , such as FPJ Bank, BBL Bank, ACB Bank and many more, banks are involved in issuing investment loans . In order to receive an investment loan, the company needs positive credit history, positive economic performance indicators, a clear business plan for future development, legal personality registered in Latvia, a minimum risk area, at least 3 years positive business results. In the case of an investment loan, borrowers are also offered an option such as a grace period of up to 2 years, during which the borrower pays only the interest on the loan without the principal amount of the loan.
To get an investment loan, in most cases, the lender should turn to legal and financial documents, a business description of the business, documents proving ownership of the collateral offered, as well as any other documents that meet the individual creditor’s individual requirements.