Georgia Loan Advice

To date, the problem of lending to small and medium business in Russia is still unresolved. The question arises – why, when so many banks and lending programs they offer, so few businesses use their services? If you do not take into account the notorious financial crisis, there are still several significant problems.

Bankers have identified two of them – first, to ensure that the company received a loan, its activities should be to a certain extent, “transparent”. For entrepreneurs this is extremely disadvantageous step, as they lose their competitive advantage, “out of the shadows. Therefore, the low legitimacy of business – one reason for denying credit. The second reason – low financial literacy of entrepreneurs. Simply put, not all have an idea of exactly how you can use these in the form of the loan funds.

Sami entrepreneurs have their own opinion. As the statistics, about 15% of small and medium-sized businesses do not take out loans because of high interest rates. Which, incidentally, is quite difficult to determine. Too many factors that affect the interest rate for a particular enterprise – and credit instruments, and the period for which issued the credit, currency, the loan amount. All this affects the interest rate.

Another reason, according to entrepreneurs – the requirements of banks to grant bail. And a third of executives surveyed did not resort to credit services because of the need for collateral. After all, the assets of small and medium-sized businesses typically have a fairly small cost. Of course, there, and unsecured credit facilities. However, in this case, the loan amount is typically less than 500-700 000. This is a very modest sum, even for small businesses that here we talk about average.

According to experts, 80% of banks have their own programs for lending to small and medium businesses. However, most programs have one common and very significant drawback – lack of a unified system of evaluation of entrepreneurs. Such a system has long been successfully operating in the U.S.. There she is called “scoring”. This system will filter out all the subjective factors, and quickly determine the feasibility of a loan to a particular company. In Russia, this analysis is a man that at times makes it difficult to objectively assess the company.

One of the necessary conditions that set all the banks – the company must be registered in the region of the bank for at least six months. No less important condition – the complete absence of outstanding loans already made. And finally, a permanent and stable income – an indicator of the success of the enterprise. The latter criterion, most banks attaches primary importance, because the presence of income – is a guarantee of return of money.

Such factors as low legitimacy of the business, in most cases, can cause a “life” refusal to provide credit services. Most banks offer or to contact them after a while again, or given credit, but on a lesser amount. Adversely affect the verdict of the bank can a bad credit history of the enterprise. According to the bankers themselves, entrepreneurs with bad credit history becomes less and less – people understand that adherence to “financial discipline” could become a guarantor for loans in the future.

Summarizing all the above, we can say that the biggest chances of getting a loan from the company, which operates in a particular region of at least six months, generating a steady income to the owner, and has prospects for development. The very same system of lending to small and medium business in Russia requires improved in several directions.

First of all – in the evaluation system of enterprises. It is also necessary to develop new loan programs, lower interest rates, improve the conditions of a loan, etc. Despite the fact that the volume of lending are growing, experts say, they can achieve in lending Western countries no less than 15 years.