Corporate finance is made available to businesses (of any scale) that want to take the debt route to quickly ramp up their operations. Corporate finance can be sought for:
Leasing equipment, tools, machinery or gen set purchase – to avoid high capital expenditure, and reduce risk of technology disuse (In case of IT and other technology-led companies), and asset acquisition at the end of the lease period
Term loans: Short or medium-term tailored to meet specific business requirements, and tide over temporary financial crisis
Working capital finance: To improve cash and liquidity
Subscription to NCDs and CPs: That can subsequently be traded in the secondary market to raise capital
Loans against securities, ESOP or IPO financing: These are loans against specific market products
Dealer or vendor finance: To lend strength to the firm’s supply chain and improve goods distribution
Other well-known methods of raising short or medium-term corporate loans with the assistance of Creditfina advisers are:
Loans against property and other assets
This is generally available for plant/factory modernization or new asset acquisition. This method of financing does not require any particular formality except that of creating a mortgage on the value of the assets against which the loan is taken.
Discounting bills of exchange
This method is widely used for meeting short-term finance needs. When the goods are sold on credit, bills of exchange are issued by the buyers. Instead of holding on to these bills till the date of maturity, companies can discount them with commercial banks on payment of a fee known as bank discount. The rate of discount is as set by the apex bank and this may change year after year.
This is another mode for meeting short-term capital requirements. Under this mode, a commercial bank may allow money to be drawn as advances for a specific time-bound period. This facility is granted to a company against the security of goods in stock, or promissory notes bearing a second signature, or other marketable instruments like Government bonds.
Fill in this Creditfina form to quickly compare different corporate finance loan offers.
This varies with the mode of finance chosen, the bank, and the company’s size of operations, credit history and market standing. It is also determined by a bank’s base rate for fund-based facility.
Based on the profit and years of business and cash flow, banks come out with their own eligibility criteria and the amount of loan they might be interested in disbursing to a business. They basically need the assurance that the borrowing business would be able to service the loan through its full tenure. That said, business loans are costly products, with the rate of interest varying between 17% to as high as 28% in case of some non banking financial institutes. The processing fee is between 2% to 3% for most banks and the sanctioned amount can be Rs 75,000 to Rs 40 lakh.
Generally the eligibility criteria are:
Type of the business, i.e. Proprietorship, Partnership, Pvt. Ltd. or Public Ltd.
Just fill-up all the documentary requirements that may differ from bank to bank, else seek advice from a Creditfina loan advisor.
This will vary, depending upon the product chosen.
Other than the mandatory requirements, i.e.
In addition, some banks may require: