SME Loan Guarantee And Failure To Pay
The question of what happens when the SME cannot pay the loan is one of the question marks in the minds of those who want to benefit from this loan. SME refers to small and medium enterprises.
Although small and medium-sized enterprises are mentioned, the number of SMEs in our country constitutes the majority of all companies. In this respect, the state also carries out various projects every year to support SMEs.
These supports and loans, which are especially conducted through Good Finance and state-sponsored banks, provide great benefits to entrepreneurs and tradesmen.
Those who want to take advantage of these loans have to show various guarantees in order to get the loan. The collateral varies according to the type and size of the loan. When these loans are not repaid, various problems arise.
What is SME Loan?
Before we talk about SME loan terms, it is necessary to mention what SME loan is. SME refers to small and medium-sized enterprises. SME loan, on the other hand, refers to loans given to support small and medium-sized enterprises.
SME loan provides great support to tradesmen and entrepreneurs, sometimes with no repayment and sometimes interest-free structures.
In addition, Good Finance and other state-sponsored banks are making efforts to revive the economy by providing these loans. In order to benefit from SME loans, it is necessary to fulfill various conditions.
What are the Types of SME Loans?
SME loan was one of the most popular loan types in 2019. The reason for this interest is due to low-interest rates and appropriate repayment plans. Before taking advantage of SME loan, it is necessary to look at SME loan types. Types of SME loans are as follows:
- Cash SME loan
- Non-Cash SME loan
From these 2 types of credit, you can choose the one that suits you best and make your application.
How to Apply for SME Loan?
The question of who is granted SME loan constitutes the necessary application conditions for SME loans. When applying for an SME loan, it will be sufficient to state the reason for requesting this support. By deciding the type of SME you want, you determine the limit of your loan and your payment term.
After the reimbursement stages are clarified, the SME loan application will be evaluated. Many banks provide loans under SME loan support.
In your application to SME loan, bank officials will consider the financial situation of the business. In addition, our tax certificate will be reviewed and you will have to make a profit. Your business must be at least 1 year old.
Documents Required for SME Loan Application:
There are some documents that people who want to apply for an SME loan should bring during application. The answer to the people who say what is necessary to get SME loan is as follows:
- Certificate of residence
- Income certificate
- Balance sheet documents
- Documents showing financial data
- Example of establishment registration in the trade registry newspaper
After we apply for an SME loan with these documents, your loan will be approved. At this stage, it will also be determined how you will get your SME loan and under what conditions you will repay it.
SME Loan Banks?
Those who want to get an SME loan can apply to the banks that gave it. Banks giving SME loans are increasing day by day. The reason for this is that the state tells the banks that it has a big duty in this regard and the economy should revive.
You can choose the bank that gives you the most suitable loan by evaluating the interest and maturity features of the banks that give SME loans. Banks that give SME loans can be listed as follows:
Apart from these banks, there are banks that offer SME loans, but banks are generally ranked as such.
What is shown as a guarantee to SME Loan?
Another issue that is important while making loan calculations is the collateral. Banks can ask for a guarantee from you to get credit. The collateral you will display may vary depending on the type and limit of the loan you will receive.
In addition, some banks run unconditional lending campaigns, while others may require different conditions.
Collaterals requested from people who want to apply for an SME loan can sometimes be a bond or a check, and sometimes it can be a real estate deed. You can choose to show collateral suitable for your loan according to your real estate or valuable document. In high loans, it is generally desired to mortgage the real estate title.
What happens if SME loan debt is not paid?
People who fulfill the SME loan conditions are entitled to receive credit support if they complete the application process positively. However, the earned credit right also requires repayment.
If you are unable to repay your SME loan debt, bank officials will contact the SME representative. In this way, your payment plan is renewed. Understanding that we are unable to pay in accordance with your old payment plan will create a new payment plan. Along with the preparation of the new payment planning, legal action is also initiated on the collateral shown.
If you do not want legal action to begin on the collateral you provide, you should not hand over the fate of your loan to the SME official. If there are other alternatives and reasons you can offer, you can meet with the bank and offer new solutions for your loan.
By talking to the bank, you can make new arrangements on interest and maturity, and stop the legal process of initiating legal action on the collateral you provide.
Since the main purpose of the banks will be to properly repay your loan, it looks warmly towards alternative solutions and healthy communication. In this way, you can pay back your loan in the most convenient way.