The request for a commercial lending is made during an interview with a lending institution. During this interview, the professional who wants to borrow must submit his complete application file. The goal for the borrower is to prove that he has a promising project, in turn convincing the bank to lend him money.
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4 Important things to know about commercial lending in Vietnam
Convincing banks to lend money is not easy. A promising project with persuasive arguments and a strong record are necessary.
Each project is different (business creation, business recovery, etc.) and therefore it requires proper supporting documents.
There are nevertheless a number of documents common to all cases:
- A presentation of the project;
- Use of loan;
- Basic personal information (ID, name, address etc.);
- Basic business information and permits (entity type, employer identification number);
- Statute of the company or business plan (summary of the business and its products and service, experience of the management team, competitive environment, target market, financial statements) if it is a business creation; and
- Proof of Business Registration.
Then there are other documents which are required by most lenders:
- Personal credit score;
- Business credit score;
- Bank statements;
- Profit and loss statement;
- Cash flow statement;
- Business debt schedule (provides lenders with insights into how the borrower is paying off, or is planning to pay off its existing debts);
- Two years of tax returns (personal & business); and
- Collateral documentation. [1] [2]
Note: In case of refusal of loan, it is possible to ask the bankers their reasons, and then resubmit a new file at the same bank for their reconsideration.
[1] Mereditch Turits, « Commercial loan documentation checklist: Everything you need to apply », Fundera.com.
[2] Ravinder Kapur « Business loan requirements: A complete checklist of documents », Caminofinancial.com.
