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Follow on Google News | Loan Application Alert: New Report! You Can Lease Letter of Credit for CollateralAn insider's look on collateral based loan application and how to secure commercial loan with leased Letter of Credit.
By: Trade Finance Capital Collateral is a solid way to prove to the financial institute that the company is a viable borrower. It's a security in a form of asset or property pledged against a loan. A collateral can be equal to, less, or greater than the value of the loan. In a commercial loan application, most financial institution typically request for three common types of acceptable collaterals: For these reasons, many companies choose to obtain a letter of credit. Established companies typically look to a line of credit established with their bank and draw upon that line of credit. Banks charge a substantial amount of fee for the service and it often takes quite a long complex process to complete. For companies with no line of credit or poor credit history, especially the SMEs, obtaining commercial loan can be very daunting. Thanks to many private companies springing up today that provides the opportunity for companies to lease or purchase a Letter of credit for a fraction of its face value from top tier banks and financial institutions. As in the case of Luxberry Homes from Lisbon Portugal seeking a project loan of 300 Million Euros for property development consisting of a mega residential housing and a luxury shopping complex situated at the heart of the city. The company was largely undercapitalized for the project and could not collateralize their existing line of credit. To get the loan approved however, a Letter of Credit from a first-tier bank among other securities was requested by the lender as a guaranteed form of collateral. They immediately sought help from a reputable collateral service provider. Upon approaching Trade finance Capital (http://tradefinancecapital.com/ Andy Daniel, a senior consultant in trade finance confirmed, "the turnaround time for the completion of the transaction and delivery of LOC via swift by TFC is largely determined by the issuing bank and the speed of compliance by the beneficiary. In average, TFC takes within 7 – 10days to process a collateral. There are many benefits to using leased collateral to secure financing: · Borrower do not have to tie up capital or assets to apply for a secured loan. · Only a fraction (7-15%) of the face value of the LOC is paid to the issuer. · Secured loans attract a lower interest rate and a longer repayment period than unsecured debt. In the case of default, bank can draw down on the letter of credit. · Beneficiary can use the money in different flexible ways they wish – bills payment, vacation, purchase a new house or vehicle, pay tuition and board, or repay an expensive loan. · Secured loans are easier to qualify for with collateral. Borrowers or companies with a poor or imperfect credit score may be eligible. · This is a good way to rebuild credit by making timely payments. Borrower can repay the loan at any time and save on interest payments. For more information on how to apply for a Letter of Credit, eligibility and general inquiry, go to http://tradefinancecapital.com and apply for free. There is no cost. For media inquiries, to arrange for an interview, presentation or an expert quote please contact Andy Daniel at admin@tradefinancecapital.com Andy Daniel is a trusted authority in Trade Finance and Collateral Management. Andy Daniel has helped several businesses raise capital by totally understanding their financial needs and provide viable funding options to get them the finance they need to achieve a lasting growth solution. End
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