There are different types of loans and one of them is commercial. As a rule, it is concluded between legal entities and is characterized by special conditions and rates.
Commercial loan terms
Commercial (commodity) lending differs from bank (consumer) lending. In particular, creditors here are not credit and financial organizations (banks), but any legal entities that interact with each other or with consumers of goods and services within the framework of a sale and purchase agreement.
Most often, the subject of lending is not cash, but finished goods, and the rate and interest on commercial loans are usually lower than on bank loans. Finally, in commodity lending, the loan fee is included directly in the price of the commodity, and in consumer lending, it is determined as a fixed percentage of the issued amount of money.
By the method of provision, there are:
- one-time commercial loans with a one-time conclusion of the contract, strict conditions and high interest rates;
- commercial promissory notes where the buyer pays for goods or services with a promissory note;
- seasonal commercial loans intended for bulk purchases of seasonal goods;
- loans with periodic payments, involving long-term cooperation between the borrower and the lender with individual conditions and maturities (differ in minimum rates or are concluded on a completely interest-free basis).
Forms of commercial loans
Various forms of commercial lending may be suitable for certain commercial or business entities. These include:
- Advance payment for delivery of ordered goods. This form is concluded on the basis of an agreement under which the lending organization produces and delivers products within a certain period of time after receiving a loan. At the same time, the quality of the purchased products must meet the necessary requirements.
- Advance payment - transfer of funds for already manufactured products, which for any reason cannot be delivered to the buyer at the production stage. For the manufacturer, such a loan acts as an additional guarantee.
- Installment is a form of commercial lending in which the seller is already the lender. He makes a shipment of goods, which will be paid by the buyer in parts within a certain period.
- A deferral, in many ways similar to an installment plan, except that the buyer pays the full cost of the goods after a certain period of time after receiving it.
The designated forms of commercial lending apply not only to products, but also to the provision of services and the performance of various types of work. The legislation does not restrict the type of activity of enterprises applying for the conclusion of the corresponding agreement.
Commercial loan rates
The average rate for obtaining a consumer loan in bank branches is about 15-20% per annum. At the same time, the bank selects individual lending conditions for each client, taking into account various factors, due to which the interest rate often reaches 25-30% per annum. Unlike bank lending, the rate on commercial loans does not actually depend on the borrower's creditworthiness. Legal entities independently find partners and, through negotiations with them, establish suitable conditions for further interaction.
The greatest advantage when using commercial lending is obtained by organizations that have had contractual obligations among themselves for a long time and regularly comply with them. In this case, the law does not prohibit the conclusion of a commercial loan in any form on an interest-free basis or with a minimum rate. Finally, flexible conditions for interaction are created due to the variety of forms of appropriate lending.
