INVESTMENT LOANS FOR BUSINESS

Every person at least once heard about the investment, but not all thought about why you should invest their own money, and how they are used. Meanwhile, some investors even with minimal contributions - a new capital for the development of the enterprise. The company develops and donates part of the profits to investors. Investments - is always a risk, but the positive outcome they are paying off in full. Almost the same is the purpose and banks engaged in investment lending business, which is significantly different from conventional loans for a variety of factors. In fact - this is a loan for business, but the bank appears here not as a lender, but as an investor, with all the rights and circumstances.
Features of investment lending business.

Risks.
The need for initial capital from the borrower.
The loan terms.
The amount of loan.
Consider all of the features in order.
1) Risks.
A credit institution in this type of loan is exposed to risks and profits are not in the form of interest, and a proportionate increase in the price of the main products of the company, which has been invested. Therefore, the position of borrowers are evaluated very carefully.
2) The need for initial capital from the borrower.
Banks, acting as investors require businesses to start-up capital for the development of the investment project, which shall not be less than 20% -50% of the total investment. If the investment has already been made, then they need to be documented.
3) The loan terms.
Investment business loan is the long-term in this area, especially when it comes to buying real estate (warehouses, offices, etc.). If conventional loans for businesses rarely exceed 7 years, this type of loan may be more than 10. There is also always provided pre-approved deferral of payments, especially if the company is seasonal.
4) The amount of loan.
Investment lending business is the target, but a small amount is not talking. In addition, the company can always get additional conventional business loan or line of credit with a smaller amount.
Forms of investment business lending.
There are 3 types of investment lending business:
Lending to existing businesses. Here minimal risks for the bank, since it is possible to assess the state concern.
Project financing. Bank money is invested exclusively in projects that exist currently only on paper. The risks are greatest, but to calculate the possible scenario, in principle, possible.
Funding for construction projects. Contributions are made for the construction of residential, non-residential and commercial premises.
Of course, the bank will invest only in real investment projects, which will be carefully monitored and analyzed. However, the loan will be the most profitable business if it can be called a loan!