Corporate credit suits the financing needs of many companies. Corporate loans and loans are worth comparing as there may be many differences in their flexibility, pricing and other features. The importance of accurate comparison is also highlighted by the fact that corporate credit and corporate loan are not different products in themselves, although marketing credit often emphasizes one type of feature and loans another.
What is Corporate Credit?
Corporate credit is a financing solution for companies. There are different types of credit and their characteristics may vary greatly depending on the lender.
The lender will determine the amount of credit it will offer, but typically the funding is provided in a range of $ 1,000 to $ 100,000. Applying for a credit is usually done online and you can get financing into your business account very quickly, even within a few business days.
In its simplicity, corporate credit is:
- corporate finance solution
- typically funding of between USD 1,000 and USD 100,000
- credit from a finance company or bank
As mentioned, corporate loans offered by different financial companies have very different characteristics. The most flexible corporate loans act like a business credit line, which operates on the same principle as a credit business account. Typically, a corporate credit line and similar services have some repayment or minimum payment plan, but, for example, a business credit line is a fully non-repayable credit and is repaid at a company-appropriate rate, without a defined payment plan.
Often, installment-free financing is the most appropriate solution for many, as it allows you to concentrate your company’s funds on just the right need, without having to pay off each month. In addition, a business credit line is not a one-time credit, but continuous credit – continuity means that the amount of funding granted can be made available to the company as needed .
The corporate credit currently available on the market is a credit linked to a payment plan.
A payment plan means that the credit is repaid in accordance with the agreement, for example monthly. In this case, the payment plan is defined in the contract and the repayment period can be from one month to several years. Financing tied to a payment plan is almost always a one-off credit, and no such credit can be made available to the company. Depending on your financial company, you can get a grace period either for a start or for certain months.
Benefits of Corporate Credit:
- In most cases, you can apply for a credit online
- You can get a credit decision quickly
- Allocated funding becomes available quickly
Corporate Credit or Corporate Loan
As mentioned earlier, the concepts of corporate credit and corporate loan as such do not, in any way, reveal the differences between financing solutions in an absolutely unambiguous way. However, if we look at the corporate loans available in the market, we may find certain factors that typically characterize them.
The business loans available today are, in many respects, similar to loans to individuals, such as a home loan, and usually require some form of real security. The loan also typically has a specific loan period and is reduced according to an agreed repayment plan. Loans to a company are often sought from a bank, so the application process may not be cumbersome online, but as with traditional loan negotiation at a branch – this will also generally increase the processing time considerably.
A business loan is granted by a bank or financial company.
In addition to the company’s solvency, the interest rate of a loan is largely influenced by the type of financier the loan is granted. A solvent company may be able to obtain a corporate loan from a bank at a low cost, whereas a company with a lower solvency can hardly get a bank loan.
The interest rates on loans from financial companies are mostly determined by the financial situation of the company applying for the loan, so they vary widely and can be very high. Particular attention should also be paid to whether the interest is paid on the basis of the limit granted or the amount of the loan or on the amount of the balance actually drawn.
A corporate loan is well suited for starting a business and for situations where a company needs financing for a single project. A loan is also a good product when you want a one-time loan, which is paid off monthly, according to the payment plan.
Because the term corporate credit is used in a variety of ways, it is challenging to define the difference between corporate loans and corporate loans in the market.