No matter what kind of enterprise, it needs certain financial support to ensure operation and expand production, otherwise it may be more difficult. Now many banks can provide corporate loans, but there are advantages and disadvantages. Let's take stock today.
First, the advantages of corporate loans
1, low cost
So far, bank loan is a low cost, not only the interest rate is low, but also the agency fee or handling fee is much lower. The most important thing is that they are safe and reliable, and they can't be routine. Moreover, it is possible to obtain certain loan interest rate concessions when applying for corporate loans in banks.
2. High quota
There is usually no upper limit for applying for corporate loans in banks, and how many loans enterprises can get mainly depends on their strength. Therefore, as long as enterprises meet the loan conditions of banks, almost all the enterprise loan quotas they want to apply for can be met.
Second, the drawbacks of bank corporate loans
1, with high loan threshold.
Although banks have abundant funds and strong background, not all enterprises can easily apply for loans. Judging from the current situation, it has become a common phenomenon that enterprises are difficult to borrow and expensive to raise funds.
Under normal circumstances, the control of bank credit risk is very strict, which often requires high qualifications, credibility and repayment ability of enterprises. As long as one item fails to meet the requirements of banks, enterprises may not be able to obtain loans from banks, which is why it is so difficult for banks to apply for corporate loans.
2. Need collateral
In the management and control of credit risk, banks have particularly high requirements for enterprises. General banks will require enterprises to provide certain collateral, and some products need to issue invoices and tax payment vouchers before they can apply.
It is difficult for small and medium-sized enterprises to provide collateral. Therefore, it is often difficult for SMEs to obtain corporate loans from banks.
Advantages and disadvantages of bank financing
First, advantages:
1. Both the supply and demand sides of direct financing funds need to negotiate repeatedly in time and quantity before reaching a transaction; Bank financial management is flexible and diverse. As an intermediary between borrowers and lenders, banks can provide different amounts and different ways to meet the financing choices of both parties.
2. Securities trading is sometimes restricted by trading batches, and small investments cannot enjoy large trading concessions; Bank credit can add up, and it can provide loans of different sizes and terms to the society.
3. In direct financing, creditors may not know enough about the debtor's credit status, so they take more risks; Before granting credit, banks have financial experts to study the feasibility of the research data and then make decisions, which may reduce the risk compared with direct financing.
4. Compared with the securities introduced by the banking law, direct securities may not be able to sell quickly and without loss in urgent need. Of course, direct financing also has its advantages. It is impossible to develop commodity economy without direct financing activities. For example, commercial credit occurs in the process of commodity circulation; Stocks and corporate bonds are also indispensable means to develop modern large enterprises and raise funds.
Second, the shortcomings:
(1) The financing amount is limited;
(2) There are many restrictions. The ways of debt financing mainly include bank loans, bond issuance, financial leasing and commercial credit.
Bank financing is a financing activity mediated by banks, and it is the main form for China's logistics enterprises and the vast number of small and medium-sized enterprises they serve to obtain funds through indirect financing. However, the traditional bank credit financing has not adapted to the vast number of small and medium-sized enterprises in logistics enterprises and other industries, and the financing demand gap has been expanding.
Advantages:
1. Both the supply and demand sides of direct financing funds need to negotiate repeatedly in time and quantity before reaching a transaction; Bank financial management is flexible and diverse. As an intermediary between borrowers and lenders, banks can provide different amounts and different ways to meet the financing choices of both parties.
2. Securities trading is sometimes restricted by trading batches, and small investments cannot enjoy large trading concessions; Bank credit can add up, and it can provide loans of different sizes and terms to the society.
3. In direct financing, creditors may not know enough about the debtor's credit status, so they take more risks; Before granting credit, banks have financial experts to study the feasibility of the research data and then make decisions, which may reduce the risk compared with direct financing.
4. Compared with the securities introduced by the banking law, direct securities may not be able to sell quickly and without loss in urgent need. Of course, direct financing also has its advantages. It is impossible to develop commodity economy without direct financing activities. For example, commercial credit occurs in the process of commodity circulation; Stocks and corporate bonds are also indispensable means to develop modern large enterprises and raise funds.
What are the advantages and disadvantages of corporate bank loans?
First, the benefits of bank loans
1, there are many preferential policies, as well as many countries' support policies for small and medium-sized enterprises. Banks have also introduced various preferential policies in response to the call of the state, thus alleviating the economic pressure of enterprises.
2. Bank loans are fast. If the submitted materials meet the requirements of the bank and the collateral or guarantor meets the standards, the required funds can be obtained quickly.
3. Low interest rate cost. Compared with other types of loan companies or institutions, the interest rate of bank loans is lower, which can reduce the repayment cost for SMEs.
4, the cost is small. Compared with other financing tools, bank loans have the lowest cost, and the interest rate of bank loans depends on the specific situation. Generally speaking, the interest rate is higher than the preferential interest rate for small business loans. The loan interest rate of enterprises with low credit rating may be higher than that of enterprises with high credit rating; The medium and long-term loan interest rate is higher than the short-term loan interest rate. On the whole, the bank loan interest rate still has a comparative advantage.
5. The source of funds is stable. Due to the strength of the bank and sufficient funds, the source of funds is relatively stable. As long as the loan application of small and medium-sized enterprises has passed the bank's examination and signed a loan contract with the bank, which meets the conditions for loan issuance, the bank can always provide funds to enterprises in time to meet their financing needs.
Second, the shortcomings of bank loans.
1, there are many procedures, and it is relatively complicated to handle loan business in the bank.
2. The collateral requirements are very strict. For small and medium-sized enterprises, bank loans need collateral or third-party guarantee, and the requirements for collateral are strict.
3. Higher credit requirements. Enterprises and enterprise legal persons need to have high credit records. Otherwise, it will be difficult to pass the audit.
What are the advantages and disadvantages of short-term bank borrowing?
Short-term bank loans refer to loans whose loan term is controlled within 1 year (inclusive). The length of the cycle also highlights its advantages and disadvantages:
Advantages:
1. The balance can be freely controlled, short-term loans can be freely matched according to their own capital use needs within the specified time, and the repayment pressure is small, and the loans can continue to be recycled after being returned;
2. The available loan amount is high and the payment method is flexible, which can solve the urgent need in a short time;
3. Because it is a short-term loan, the period is not long, which can save interest and cost.
Disadvantages:
1. If the funds you borrowed need to meet the turnover for a long time, short-term loans are obviously inappropriate, because it is stipulated that they should be returned in a short time;
2. Interest on short-term loans shall be settled quarterly. If the repayment is not made on schedule, compound interest will be calculated according to the penalty interest. If it is not repaid in a short time, the creditor's rights will deteriorate.
Therefore, whether considering short-term loans or long-term loans, it is good to choose according to your actual capital needs.
What are the advantages and disadvantages of bank borrowing as a financing method?
Advantages: (1) Compared with issuing all kinds of securities, it takes shorter time to obtain loans and can meet the capital demand quickly. (2) Compared with issuing bonds, the loan interest rate is lower and there is no need to pay a lot of issuance fees. (3) Enterprises can contact the bank directly to negotiate the amount, term and interest rate of the loan, and the situation can be negotiated after the loan, which is more flexible. Disadvantages: (1) The amount of funds raised is limited; (2) There are many restrictions. The ways of debt financing mainly include bank loans, bond issuance, financial leasing and commercial credit.
(1) Bank Loan Borrowing from a bank is a financing method for enterprises to borrow the required funds from relevant banks or non-bank financial institutions according to loan contracts, also known as bank loan financing.
(2) The issuance of corporate bonds refers to the securities issued by the company in accordance with legal procedures and scheduled to repay the principal and interest within a certain period of time.
(3) Financial leasing refers to a contractual act in which the lessor grants the lessee the right to possess and use the property within the agreed time limit under the condition that the lessee gives a certain reward. Financial lease, also known as financial lease, is a long-term lease form different from operating lease. Because it can meet the long-term demand of enterprises for assets, it is sometimes called capital leasing.
(4) Commercial Credit Commercial credit refers to the loan relationship formed by delayed payment or delayed delivery in commodity transactions, which is a direct credit relationship between enterprises. Using commercial credit, also known as commercial credit financing, is a short-term fund with various forms and wide application.
bank loan
Advantages: 1 fast financing speed, low financing cost and good loan flexibility, that is, flexibility, and the contract can be changed according to specific requirements.
Disadvantages: 1 The financial risk is relatively large; 2. More restrictions; 3. Limited financing amount; 1. Factors affecting the borrowing cost The cost of borrowing financing is affected by factors such as handling fees, interest rates, payment methods and various credit conditions.
(1) handling fee. Handling fee refers to the fees charged by banks for management activities such as investigation and evaluation when accepting corporate loans.
(2) interest rate.
(1) Preferential interest rate: generally used when granting loans to large enterprises with good operating conditions and strong financial resources. It is the lowest line of bank loan interest rate.
② Floating preferential interest rate: it is a preferential interest rate that floats in the same direction with the change of other interest rates.
(3) Non-preferential interest rate: generally, it is given to some enterprises that have little contact with banks and don't know much about their credit situation. This interest rate is generally obtained by floating a certain percentage on the basis of the preferential interest rate. For example, the bank's preferential interest rate is 7%. Because an agricultural enterprise is lending for the first time, banks don't know much about the credit standing of the enterprise, which increases the loan risk. So the interest rate given to it is the prime rate plus 2%, which is 9%.
(3) payment method.
① One-time payment method: refers to the way that an enterprise makes a one-time payment to a bank and repays the principal and interest once the loan expires. Under this method, the nominal interest rate is the real interest rate.
(2) Discount method: when a bank issues a loan to an enterprise, interest is deducted first, and after the loan expires, the enterprise only needs to repay the principal. Under this method, the loans that enterprises can actually use are reduced and the real interest rate is higher than the nominal interest rate.
The advantages and disadvantages of bank loans and the advantages and disadvantages of bank loans are introduced here. I wonder if you have found the information you need?