All material or immaterial needs related to the activity of the company can in principle be financed by a loan. In return, for the granting of a loan, the banking establishments require guarantees to compensate for a financial failure of the borrower. What guarantees can be requested by banks with the granting of a professional loan ? Pledge, mortgage, surety or counter-guarantee, let’s take stock of the different possible guarantees.
What is a business loan?
A professional loan is intended exclusively for businesses and entrepreneurs. The borrower can be either a legal person or a natural person exercising an independent professional activity. The nature and size of the business are irrelevant. The professional loan is granted, under conditions, to any sector of activity and both to a VSE, an SME or a large group.
What to finance with a professional loan?
With a professional loan, it is possible to finance all the needs of the company: from its creation to its operation through its international development phase for export for example. The possible financing with a professional loan are:
How to guarantee a business loan?
As with a Business loan for individuals, banks and credit organizations require a guarantee when a company or its manager takes out a professional loan. The guarantee allows the lending institution to recover its money in the event of the borrower’s financial default. We have identified four types of guarantees possible with a professional loan: pledge, mortgage, surety or counter-guarantee.
Secure a business loan with collateral
Pledge, also called pledge, is according to civil law a conventional guarantee between a debtor and his creditor. It is used to guarantee a loan intended to finance a real estate investment or an intangible asset. These are for example:
The acquisition of shares or shares.
When the bank requires a pledge of the professional loan to finance intangible assets, it can require the sale to recover its money in the event of default by the borrower. This privilege is registered with the commercial court as a priority payment at the bank.
Guarantee a professional credit with the mortgage and the privilege lender of money
Another possible guarantee with a professional credit is the mortgage or the lender’s lien. The mortgage relates only to the financing of real estate. It is the subject of a notarial deed and therefore incurs costs. If this guarantee is triggered in the event of default, the bank becomes the owner of the property. In principle, she sells it to settle the debt. With a money lender’s lien guarantee, the property is seized in the event of default by the borrower to be sold. The bank then has priority, that is to say rank one of the creditors to be repaid.
Guarantee a professional loan with a joint or personal surety from the manager
The surety bond, also called fidejussion, is the 3rd possible guarantee with the granting of a professional loan. A guarantor is a natural or legal person who guarantees the loan from the bank. The deposit is of 2 types:
Either a personal guarantee, most often that of the manager: it involves the personal assets of the manager, but also those of the spouse.
Either a joint surety: it has a much wider scope, extended to any surety to which the bank can turn to recover its money.
Secure business credit with a counter-guarantee
Guaranteeing a professional credit is also possible with a counter-guarantee. This system makes it possible to reduce part of the risk of non-payment by subscribing to a guarantee with mutual guarantee organisations. The best known are BPI France, SACCEF and SIAGI. They guarantee 40 to 70% of the total amount borrowed. In return, the organizations receive additional interest paid by the borrower.
Does insurance replace a warranty?
Insurances like that of the key man of the company are not considered as a guarantee, as defined above, by the banks. Some are however requested in addition when taking out a professional loan, in addition to the guarantee.
Insurance protects the insured or beneficiary mentioned as such on the contract. That of the key person, for example, protects the manager and the company in the event of involuntary professional misconduct, negligence or omission. It also protects the company if the employee is on temporary or permanent sick leave.
The bank also requires loan insurance with professional credit. Even if this is not a legal obligation, in fact few establishments grant credit without its subscription. Professional loan insurance protects the bank, the borrower and their family in the event of financial failure following an accident, illness or death. If the borrower can no longer repay his credit in the event of disability, incapacity or death, the insurer takes over.
In addition to the guarantee required with a professional loan, the bank examines many criteria before granting a loan. The project to be financed must be realistic and well defined. The company must be solvent and establish a quality business plan. To find a professional loan, the manager competes with banks and credit organizations. He can thus more easily negotiate the interest rate and reduce the cost of borrowing. An online comparator or an independent broker can help him in his search for a professional loan.
Understanding the guarantees necessary for a business loan is crucial, particularly when considering an outsourced Mortgage QC audit. With professional oversight, the verification of these guarantees becomes meticulous and efficient, ensuring compliance and minimizing potential risks. This approach fosters a secure financial environment, allowing businesses to thrive and expand confidently.