What are they and what are their requirements? | Business loans

For small entrepreneurs, growing or concretizing large projects can represent a challenge for the issue of access to capital. The Government of Spain, aware of this, designed an institute whose mission is to assist small merchants in achieving their goals and objectives.

The Official Credit Institute (Good Lender) was created in order to help SMEs and entrepreneurs in the expansion of their businesses, so it offers loans aimed at microentrepreneurs, freelancers and NGO representatives, for the materialization of their growth or internationalization. If you are interested in having information about what Good Lender loans are and what requirements they have, here we tell you more.

What do Good Lender business loans consist of?

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Each small business has this credit tool at hand to solve projects that require an investment, make payments, resolve liquidity issues, or for the purchase of goods, fixed assets, improvement of facilities, or renovation and remodeling of real estate. .

These are some of the main features of Good Lender loans:

  • ✔️ Maximum amount of 12.5 million Dollars.

  • ✔️ They may have a fixed or variable interest rate. For Good Lender 2019, the maximum interest rate is 2.30% if it is for one year. For operations between 2 and 4 years the maximum rate will be 4.00% and for more than 5 years it will be 4.30%.

  • ✔️ Banks can only charge commissions for opening and prepayment.

  • ✔️ Maximum payment term is 20 years and the minimum one year.

 

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What are the main requirements of Good Lender loans?

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The main thing in this type of business loans is to design a project that exposes the destination to which the requested money will be used, the way in which it will influence the profitability of the company in the short term and the capital to be requested to execute. According to the money to request, the company must have a way to strengthen its economic solvency, demonstrating payment capacity or giving some type of guarantee.

Loans for Good Lender companies are requested directly at the bank offices, who are responsible for receiving Good Lender loans, study the case, approve or reject, and follow up on the request. So, depending on each institution, the requirements of Good Lender loans, commissions and interest rates, among many others, may vary. Hence, the importance of research to know the advantages and disadvantages of taking credit with a certain entity. Relying on tools such as a personal online loan comparator can make the job easier. 

Entities that Good Lender loans for companies

Entities that Good Lender loans for companies

⭐ Good Lender BBVA loans . The BBVA institution is one of the financial institutions in charge of processing this type of loans, grants loans of up to 25,000 Dollars, and its interest rates vary according to the type of loan that is approved, for example, for BBVA Good Lender loans of a year, the rate ranges from 2.3% and if it is more than 4 years, the rate amounts to 4.3%.

⭐ Good Lender loans. The bank has a catalog of lines that range from national activities such as the process to internationalize. For example, in national small business plans they contemplate approval in case of liquidity or remodeling needs. The Good Lender loans stipulate a single commission at the beginning of the operation, and an additional one in the event of an early repayment.

 

Alternatives to Good Lender loans

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While the options offered by the Good Lender are very attractive, you will not always be able to access them. Do not let this be an obstacle to carry out your project, and consider other traditional credit alternatives such as personal loans, payroll advances or even larger options such as loans of 2,000 Dollars. The possibilities are many, you just have to check.

Issue of guarantors against loans or credits by a bank

Currently, the granting of a credit policy or any type of loan by a banking entity, whether a mortgage or personal, is subject to someone with solvency for the bank that guarantees compliance with the payment obligations of the loan contract or credit policy with the provision of a guarantee.

As you will know, when applying for a mortgage loan or a credit policy, credit institutions or banks usually also require a personal guarantee (usually from relatives of the main debtor applicant) to have a better guarantee that they will charge the debt or loans, since it may be directed against the debtor’s assets, the mortgaged property, and the guarantor’s assets.

Issue of guarantors against loans or credits by a banking entity

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In addition, the bank usually requires that the guarantee be “solitary” and that the guarantor waive the benefits of “exclusion, division and order” (to which he is entitled under the provisions of the Civil Code) in order to claim him immediately without first having the principal debtor declared insolvent or having to auction the property.

But we must be careful, because the bond or guarantee is the result of a contract, and therefore of the will freely be issued by the parties, and we must be aware of its consequences when the principal debtor does not pay and the bank makes known to the guarantor or guarantors who respond with all their present and future assets of a foreign debt.

In the bond there are several relationships:

  1. That of the debtor with the creditor (which is usually a bank).
  2. The bank with the guarantor.
  3. That of the guarantor with the debtor.

The problem of claiming debt to guarantors and clauses by which their rights are waived.

The guarantee is a type of bond, that is, a guarantee in the payment, which is regulated in the Civil Code, by which one is obliged to pay or comply with a third party, in the case of not doing so, with all its goods and rights, present and future. Thus, in the case of mortgage loans, if the person receiving the loan fails to pay it back, the guarantor will be obliged to pay it instead.

In the banking field, it is common for the bank to require as a condition to grant a loan that another person guarantees or guarantees its repayment: if it considers that the guarantees presented by the borrower are not sufficient to assure him that he will be able to repay the loan, he wants there to be Another solvent person who agrees to do so in case the borrower fails.

However, we must know that the figure of the guarantor in civil law enjoys, in principle, a series of rights, such as the rights of excuse and order, by virtue of which the guarantor can demand from the creditor (in this case the bank) the realization, in the first place, of the assets of the principal debtor of the loan and, in addition, to designate which assets of that one should be the ones to be executed in case of default.

The legal regime of the bond

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Established by the Civil Code is that the creditor may only demand payment from the guarantor once he has claimed the principal debtor and no longer finds assets to be seized; that is, it can only claim the guarantor when the principal debtor becomes insolvent; This is what is called an “excuse benefit.” However, the civil regulations allow the guarantor to renounce said benefit or to be jointly and severally liable to the principal debtor, that is, to assume the debt as their own, so that the creditor can claim payment either from the borrower or the borrower. guarantor.

The division benefit, in the case of several guarantors, if the bank claims the debt from a guarantor, the latter may ask the guarantor for the part that corresponds to it, unless it has been agreed that all the guarantors will respond jointly (which also usually look at the bank clauses).

On the other hand, it is also very common for mortgage debtors, throughout the life of their loan agreement, to agree or renegotiate with the titleholders of the loan modifications without the guarantor’s consent: such as the extension of the borrowed capital, of the return period, etc.

Such modification or novation of the loan contract without the consent of the guarantor leads to the application of the extinction benefit established in the Civil Code, which provides that “the extension granted to the debtor by the creditor without the guarantor’s consent extinguishes the bond”, and, therefore, the responsibility of the guarantor ignored in the agreed novation will not be enforceable when the modification of the conditions initially agreed to affect the amount of the loan, its interest, or the term of the contract.

In practice, credit institutions demand the solidarity of the bond, so the guarantor is excluded from these rights of excuse, order, division, and therefore, may be required in payment at the same time as the principal debtor, and not in a subsidiary manner as provided by the Civil Code.

An example of such a clause would be this:

(…) “The guarantors or guarantors of this operation, by themselves and by their heirs, where appropriate, are responsible for the fulfillment of all the obligations contracted by the borrower under this contract, and the consequences of those and the latter. , relieve entity X of any obligation of notification for non-payment of the secured debtor and expressly waive the benefits of order, excuse, division and termination determined by article 1.851 of the Civil Code that could legally assist them for their condition of sureties. The guarantee regulated here will be subject to the same stipulations of the main operation, insofar as they are applicable ”.

Attention. If the bond or guarantee granted is joint and several, in accordance with the regulations of the Civil Code, the creditor (bank entity, in this case) can address either the lender or the guarantors.

Finally, we must bear in mind that the debtor responds to the fulfillment of the obligations “with all his assets, present and future”, that is, after the death of the guarantor, it will be the corresponding heirs of the deceased who assume said obligations.

Better mortgage or bond?

Better mortgage or bond?

In the case of a person who is mortgaged, the debt is guaranteed only with the mortgaged property, but with neither more nor less assets. In the second case (bond or guarantee), the guarantor guarantees the debt with all his present and future assets, that is, with his home and all the others he has or may have, which is better for the bank since it can garnish the payroll or pension without having to go to the long judicial process that the foreclosure lawsuits suppose.

In recent times we have been acquainted with numerous judicial resolutions, both at local, state and even European levels, including ex officio, which refer to the existence of abusive clauses of numerous contracts concluded with banking entities.

Recently the courts are ruling that a guarantee of this type is null and void, based on the fact that the buyer or lender and the guarantor are private, and therefore the regulations of consumers (Law of General Conditions of Contract and Consumer and User Protection Law) which considers it abusive to impose disproportionate guarantees on the consumer.

(the bank already has the guarantee of the debtor’s estate and of the estate itself), such as, for example, the judgment of 02-10-2014 of the Court of Appeal Mercantile number 1 of San Sebastián declaring the annulment of the solidarity guarantee that two parents granted in favor of their children in a mortgage-guaranteed loan, on a home that they acquired, considering the waiver of all rights that corresponded to them As guarantors

Fast loans are financial loans that are requested

It is important to remember that the annual APR does not fall below 20%, so it is preferable to evaluate other options before hiring

In the middle of January, many families consider the possibility of requesting a loan to make the payment of the multiple goods acquired at the beginning of the year more bearable. Initial estimates indicate that in the past Christmas we spent between 6.5% and 8% more than in previous Christmas.

Now, to face the beginning of the year, an increasingly used option is to request the so-called fast credit. Only in 2004, the entities of this sector granted in Spain credits worth 11,706 million dollars. This means that about four million Spaniards hired a product of these characteristics, attracted because they allow obtaining the money in a few days without having to give explanations to the financial entity of the use that will be given to the requested capital.

However, the biggest drawback is the high-interest rates that applicants must pay: the annual interest rate does not fall below 20%. For this reason, consumer associations recommend caution when hiring these high-interest loans and advise that families strive to moderate their consumption.

Fast loans are financial loans that are requested

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From 500 to 6,000 dollars, with repayment periods of up to 60 months (five years). They do not usually present opening commissions, although their interests are around 20% APR. This type is usually, sometimes, masking the client informing him only of monthly interests. If that monthly interest is multiplied (around 1.8% by twelve), the clearest reality is seen. In addition, for early cancellation of the loan, commissions usually apply around 1% on the amount that remains to be repaid.

On many occasions, those interested in a fast loan do not usually pay the attention they deserve to the interest rate data that will be applied to the requested money, or to the commissions.

Many users get carried away by the possibility of having the money instantly, which is one of the main characteristics of this type of loan. In addition, the freedom to use the money without having to justify its purpose to the financial institution that grants it is another of the features that most promote your request.

The product is contracted practically without paperwork

The product is contracted practically without paperwork

To be able to subscribe to a loan of this type, the documents that the entities usually request are a photocopy of the DNI, the last payroll, a receipt domiciled in a bank (only occasionally) and the number of the current account in which the loan. The entity undertakes to provide the money within 24 or 48 hours after receiving all the required documentation.

How much does a quick credit cost?

Apart from these “hooks” (widely used in the advertisements of entities), subscribers should not forget to look at the interest rate they will have to pay. It is convenient to make accounts of how much the operation can leave. For example, Good Finance currently offers a loan of 3,000 dollars at an APR interest of 21.92%.

Although at the outset it is a very high interest, the entity tries to make the product acceptable and attractive, allowing it to be amortized within 42 months. Thus, the monthly fee that the customer must pay is 99 dollars. Simple operation allows you to calculate that the customer must pay a total of 4,158 dollars, 1,158 dollars more than what they lend.

In Good Credit they give the possibility of hiring a fast loan of 600 dollars, to be paid in 25 monthly installments of 30 dollars each. The interest rate applied is 25.56% APR. In this case, the client will end up paying 750 dollars, 150 dollars more than requested. Being a smaller amount than those mentioned above, the interest is higher.

From these examples, it can also be deduced that since they are small loans, the entities are interested in offering ample repayment periods since that means charging them higher interest.

However, customers should assess their possibilities and try to find the most suitable combination between the monthly installment to be paid and the total term of the loan. Sometimes, extending the term more than necessary means paying interest for more years and narrowing it in excess can lead to a heavy burden. The important thing is to choose the quota that is most comfortable for the consumer.

What entities grant them?

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A decade ago, only three entities operated significantly in this segment. Today there are five major firms that share the cake of fast credits. Good Credit, Good Finance and E-Money are the three financial credit institutions specialized only in fast loans operating in Spain.

Román García-Miguel explains from Good Lender Bank that they entered this area because they considered that it has a long history. From SCH they estimate that the entry of large entities has given solidity and credibility to this business that, despite everything, is still viewed with suspicion from many sectors.

Why is an online loan cheaper than signing a contract in the branch?

 

Taking out a loan via the Internet has long been part of everyday life. This form of contracting offers many advantages, both for the borrower and the lender. The processing is done faster, can be done conveniently at any time of the day from the home computer and the comparison of different loan offers is greatly facilitated.

Another, frequently mentioned advantage also includes the fact that the terms of an online loan can be much more favorable for the borrower than would be the case with a loan through a bank branch. But why is that actually?

Saved costs are passed on to the customer

Saved costs are passed on to the customer

With an online loan, the lender does not have to do any of the steps that would otherwise have to be done by his staff. The borrower fills out all of his forms online himself. In many cases, advice is not necessary. If at all, the borrower answers only a few important questions by email or phone. Since many documents are filled in on the PC and submitted digitally, the laborious reading of the original papers into the provider’s database is also made easier.

All of this means that processing can be carried out with a minimum of personnel – the company has to cover lower costs than if a contract was signed in the branch. A direct bank can offer particularly low interest rates because it also saves the high operating costs for the branches. Branch banks also have better conditions in their online offer.

Since the borrower takes over many processing steps himself and does not provide on-site advice, the staff is relieved and meanwhile carries out other tasks. Since the lender takes less effort and costs to grant a loan, he can pass these savings on to the customer.

Time saving

Time saving

Time is money – this also applies to the granting of loans. Applying for an online loan is not only quick for the recipient but also for the lender. While the daily working hours of employees in a branch are limited and appointments have to be negotiated, theoretically several thousand people can apply for a loan online at the same institute every day.

Missing data is also no longer necessary, since many forms can only be sent if they have been filled in correctly and without gaps. This is a huge advantage for the lender. His employees can immediately work with the complete documents and save valuable consultation time. In particular, looking after customers whose loan applications are ultimately rejected takes a lot of time without making money for the company.

Not only the customer benefits from the quick conclusion of contracts, but also the company. The faster the money flows and the less time it takes to invest in each contract, the higher the profit for the lender. This is also one of the reasons why direct banks can offer the cheapest loans.

What documents are required for an online loan?

More and more banks are also offering loans to private individuals online. It is convenient and quick and only takes a few minutes. You often read statements like: “With a few mouse clicks to the loan!” And the like. In practice, however, it is not quite as simple as the banks need certain documents to check the loan application.

What documents are needed?

What documents are needed?

In the first place is proof of the identity of the applicant. The easiest way to do this is with a copy of the front and back of the German identity card. Another way of proof of identity is a copy of your passport (the page with the photo and personal details). Since the passport does not contain a home address, it may be necessary to enclose an official registration certificate from the registration office with the documents.

The certificate must not be older than 6 months to meet the requirements of the bank. Foreigners with permanent residence in Germany must send a copy of the foreign passport (also the page with a photo and personal details) and a copy of both sides of their residence permit. A current registration certificate may also be required.

The bank still needs the applicant’s proof of income. This is either the wage or salary statement or the pension notification. In most cases, proof of income from the past two or three months is required. These documents must be sent in in the original, copies are not accepted.

Some banks also require the bank statements of the account to which the income is usually transferred. The latest account statement is usually sufficient, but sometimes requests for the last two or three months are also requested.

What should applicants pay attention to?

What should applicants pay attention to?

The fastest way to process the loan application is when all documents are ready and complete. To avoid delays, read the instructions given by the bank carefully and adhere to them. Manipulation of payslips or bank statements is strongly discouraged, as these are official documents. Unauthorized changes to it are not permitted.

If the bank notices such changes, the loan application is rejected in any case. On the other hand, it is legal to choose a month or a period in which you earn more than usual when you apply, for example, because the month has more working days or because you work overtime.

If you value getting your documents back, it is advisable to enclose a sufficiently franked and self-addressed envelope. Since the necessary documents are sent by post, it takes several days to process the loan application, especially if there is a weekend or a public holiday in between.

If a loan is approved on the Internet immediately after completing the form, this commitment is not binding, but only provisional until all the requested documents have been checked. Because the identity of the applicant also has to be checked, it takes a relatively long time for the loan amount to be transferred to the specified account.

More flexible consumer loans

The cheapest consumer loans are around 5%, although, in order to benefit from this interest, the entities demand to be linked by hiring numerous other products, such as cards, insurance, and domiciliary payroll and several receipts

There are many families who currently decide to go on a trip or make reforms in their home by hiring a personal loan … The high rate of consumption of Spanish households, which has been growing at rates of 4% in the last five years, makes many people have opted for the philosophy of living at full speed, many times to the limit of their possibilities.

More flexible consumer loans

More flexible consumer loans

In this scenario, consumer finance acquires a very important role, which has grown at rates above two digits in the last three years. In 2006 alone, financial institutions granted loans worth 81,000 million dollars, which is 14.7% more than in the previous year.

Now that the mortgage business is starting to slow down, there are many entities that have announced that they will pay more attention to their consumer loan business.

In general, although interest rates have risen, banks and savings banks are making it easier to grant this type of personal credit. Extending financing periods or introducing grace periods are some of the facilities that include many of the new loans.

A product that interests

A product that interests

The consumer credit market (credits that allow the financing of consumer goods such as vehicles, travel, household appliances …) has been driven in recent years by an environment of the favorable economic situation, low-interest rates and the great dynamism of spending in household consumption.

Currently, although interest rates have risen and, in general, loans are somewhat more expensive, the slowdown in the mortgage business is moving many financial institutions to improve the conditions of their consumer finance products. Philippe Fevre, responsible for assets of Fine Bank Spain, says that the personal loan segment is today one of the most interesting for entities.

“More and more people finance their travels, their reforms at home, technological whims such as plasma televisions … It is an attitude that is gaining ground in Spain,” he says. Salvador Maldonado, director of external relations and studies of Agree Bank, believes, in addition, that consumption will remain ‘strong’, so he hopes that this business will continue to offer interesting results also in 2007. “We estimate that consumer credit will grow at rates between 14% and 14.5% in 2007, “adds Maldonado.

The conditions

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With this scenario of rate hikes, high consumption, and economic slowdown, entities are striving to introduce peculiarities to their consumer loans. They want to include exclusive advantages that make their products flexible so that they meet the needs of customers.

A report by the Bank of Spain states that at least ten entities relaxed in the fourth quarter of 2006 the conditions applied to their loans to household consumption, while, on the contrary, they tightened the criteria for approval of new mortgages.

From the consultant Good Finance they assure that the moderation of the private consumption and the rise of the interest rates configure a scenario in the short and medium-term in which a slight deceleration of the growth rate of the new investment in consumer credit is foreseeable.

“However, the growing need for liquidity on the part of families will compensate for the impact of the rise in interest rates in the demand for consumer loans, causing greater pressure on entities to make the repayment terms of the loans more flexible,” add.