Analysis on Various Business Loan Types

BUSINESS LOAN

 

The business needs sufficient capital to fund start-up expenses or pay for the expansion. So companies get business loans to get the financial help they need. A business loan is a loan term and the company is obligated to repay the loan. According to the small business administration, business owners need to understand how the loan works and what the lender wants to see from the lender before approaching the lender for a loan.

 

Cash Loan

Cash loans are a popular loan method among many people. You can get a cash loan within day People apply for cash loans daily. From this, you can emergency finance problems in your life

 

Bank Loan

 

Bank loan is the most common form of debt capital for a business.A bank loan provides medium or long-term financing. The bank specifies the exact period of the loan (3,5or 10

Years), the interest rate and the amount

 

 

 

 

 

 

Mortgage Loans

 

A loan secured by real estate or real state is called a mortgage. Instead of the homeowner receiving funds to buy a property or home, the lender promises to repay that buyer’s promise for a specific cost within a certain time frame. The mortgage is legally binding and gives the lender the right to make a legal claim against the lender’s home if the borrower defaults on the note, basically, the borrower owns the property or the home, but the lender owns it until it is fully paid off.

 

Small Business Loan

 

Small business loans, loans given by a lender to small businesses for various purposes. These loans have limited requirements and can help small business secure funds. A small business loan can provide other incentives to the borrower thus reducing the cost of doing business.

 

 

 

 

 

 

Unsecured Loan

 

Unsecured loans don’t have asset for collateral. These loan can be more difficult to obtain and have higher interest rates

For example,

  • Credit card debt
  • Personal loans
  • Bank overdrafts
  • Credit facilities or lines of credit

 

 

Loan Agreement

 

Loan agreement are documented by their letters obligation, agreements, promissory notes, and collateral that reflect the understanding between the parties involved

 

Contents of Loan agreement

The format of credit agreements varies greatly from industry to industry, but professionally drafted commercial loan agreement will incorporate the following term,

 

  1. Parties contract with their addresses.
  2. Definitions or interpretative provision.
  3. Facilities and objectives
  4. Conditions before use
  5. Repayment arrangements
  6. Prepaid and cancellation provisions
  7. Interest and Interest period
  8. Provisions relating to rough handing of any detention imposed
  9. Payment Provision
  10. Representation of borrower
  11. Representation of lender
  12. Borrower agreements
  13. Default events fixed by default
  14. Provision for deeds and liquidity damage
  15. For syndicated loans, provisions relating to the facility agent and the security agent and the voting of the lenders
  16. Formulas for calculations
  17. Provision for lender’s fees
  18. Provision for expenses
  19. Amendments and waiver provisions
  20. Agreements relating to changes in parties
  21. The processing clause
  22. Intensification clause
  23. Counter clause
  24. Addresses for ads
  25. Language allocation
  26. The choice of the rule of law
  27. Forum selection clause
  28. Appoint a process agent

 

 

 

 

 

 

 

 

 

Personal Loan

Many people use personal loans for many immediate actions. Because of it does not mention a main purpose. As such personal loans is an unsecured from of loan. But people don’t   care about it because personal loans are multi-purpose loans and there is no limit of expending the loan. In fact personal loans help people to increase their loans.

 

Bad Credit Loan

A bad credit loan is a personal loan. Bad credit is given to reinsurers who have weak, bad or no debt. This loan is expensive. Generally, creditors charge higher interest rates than ordinary borrowers. Borrowers need to know their own credit score and then follow up on whether or not they have bad credit. They can decide it according to the lender’s score.

 

Personal Loan Interest Rates

Bank name Max. loan Amount (LKR) Max. repayment period (year) Min. Salary (LKR) Min. interest rate
BOC 3 millions 7 30,000 13.5%-14.5%
Commercial bank 5 million 7 30,000 13.5%-17.5%
DFCC bank 3 million 5 20,000 15%-18%
HNB 5 million 7 50,000 14,5%-15%
NDB 3 million 5 32,000 15.75%-16.45%
NTB 5 million 5 60,000 15.5%-18%
Pan Asia bank 3 million 5 30,000 17.5%
People bank 3 million 7 30,000 14%-16.5%
Standard Charted bank 10 million 5 50,000 15.5%-18%
Union bank 5 million 5 35,000 16.75%-18%
Cargills bank 5 million 5 30,000 16.75%-18%
NSB 3 million 7 30,000 14%
Abans Finance Varies 5 30,000 Varies
Alliance Finance 5 million 6 60,000 13.65%-14.5%
CDB 5 million 5 25,000 Varies
LB Finance Varies 5 30,000 Varies
Seylan bank 5 million 7 50,000 13.5%-16%

 

 

 

 

Car loan

A car loan is a personal finance product where the financier funds the borrower to buy a vehicle for personal use. The loan is secured against the vehicle and the customer retains the full title of the vehicle at the end of the contract.

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Online Loan

Now people can apply for personal loans online. Following banks and financial institutions ready to give online personal loans according to their conditions and term.

  • Commercial bank
  • BOC bank
  • Sam path bank
  • Pan Asia bank
  • Cargill’s bank
  • HNB