Investment loan: advantages and disadvantages, rules for drawing up an agreement

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Developing your own business requires investing additional amounts, and entrepreneurs do not always have these funds. We have to attract third-party resources.

One of these resources is an investment loan.

What is an investment loan and how does it differ from investing?

An investment loan is a loan of money to a developing or existing business for a specific business project.

This loan has its own specific differences compared to traditional types of banking products:

• Long term. The period of using borrowed funds lasts from the moment the business idea is implemented until the first profit is received. Therefore, the minimum period for providing funds is at least 3 years;
• Intended use. The borrower has no right to use the money for any purpose. The lender regularly checks the intended use of funds for the business project specified in the agreement;
• Large amounts. Opening a new business or updating an existing business requires serious financial investments, so the minimum amount of investment loans is set at 1 million rubles.
• A special package of documents. In addition to the usual documents required to obtain a bank loan, the borrower must provide the future lender with a detailed audit analysis of the state of his business, a high-quality business plan and profitability forecast.
• Special repayment terms. The debt repayment schedule is developed not on the basis of calendar periods, but on the basis of project implementation stages.

The main factors for making a positive decision on granting an investment loan are a high-quality and well-thought-out business plan, the financial condition of the borrower and the financial stability of the economic sector in which it is planned to invest additional funds.

Investment loans have nothing to do with investments. Loans are provided on terms of payment and term, and the lender does not receive the right to participate in the management or distribution of profits of the entity being loaned. Although investments, like investment loans, are long-term investments, they do not have the principle of return. The investor is one of the participants or founders of the company and takes an active part in the distribution of profits.

Types of structured products

There are a lot of types, moreover, the asset is moving along the path of complication, even experts working in this industry do not recommend stopping at this tool if you lack experience and skills.

Now regarding the existing options. There are instruments with 100% capital protection - this is a reliable story, but many companies resort to tricks to make this instrument profitable. And often, as part of reliable products, they slip in instruments such as subordinated bonds, which are very risky.

The second popular product is for a basket of safta kola shares, when the broker can close the product early under certain conditions. For such products, if the client receives a good profitability higher than discussed earlier, then the broker cuts this profitability and closes the product.

Although if clients bought on a regular exchange market, profitability would be unlimited.

Structured products are:

• over-the-counter – these are very undesirable conditions, for example, they include DM, investment life insurance;
• exchange - this type is better in its structure, they are more flexible. The person who buys them can take active actions himself if the market goes in an undesirable direction.

It is important to understand that exchange-traded products are good in the hands of those who can work in this direction, especially in the derivatives market. For most who are looking for an alternative to a bank deposit, this product is absolutely not suitable.

Who can provide an investment loan?

An entrepreneur who decides to raise borrowed funds to expand his business must carefully study loan options and choose the most favorable conditions for himself.

There are several institutions involved in lending for business projects:

• Government departments. The state supports the development of small and medium-sized businesses and develops programs for their subsidies and preferential lending at the federal level. The authorities are also not standing aside. They create their own programs to support those industries, the development of which will bring new jobs to the region in the future and improve the economic performance of the region. Therefore, when applying for a loan from government agencies, the borrower must be prepared to undergo thorough checks and meet the strict requirements of the lender.
• Credit organizations. These include not only banks, but also microfinance organizations. Unlike banks, MFOs put forward more loyal requirements for the borrower; here there is a greater chance of getting a loan for an individual entrepreneur. At the same time, interest rates for using credit resources from MFOs are significantly higher than in the banking sector. Banks give preference when issuing investment loans to large and stable companies.
• Investment firms. These are associations of wealthy people who want to invest their money to make a profit. A potential borrower applying for assistance undergoes no less serious selection than when applying to government agencies. After evaluating the submitted business projects, the most promising ones are selected. It is extremely difficult to qualify for such a company.
• Leasing companies. They are convenient to use when expanding the boundaries of your business requires the purchase of new equipment.
• Legal entities. You can try contacting the director of a large enterprise operating in your region. If the business plan interests him, he can finance such a project. An enterprise can provide loans to its branches or subsidiaries.
• Private investors. This role can be played by relatives, acquaintances, friends, and employees. Loans from such lenders will not be large, but they will be sufficient for the first steps of an individual entrepreneur. The main thing is to draw up an agreement to guarantee the lender a return on the money invested.

Negative sides

Every legal transaction has its downsides. In investment borrowing these include:

Read about applying for a loan from a pawnshop secured by gold in the article: loan from a pawnshop in 2021. Read what gold loan bonds are here.

Read here how to get a loan for 6 months on a card.

In Russia, not every company, even one that is successfully developing, can receive a loan specifically for business development. It’s easier to get a purpose-free loan without using government assistance or a special banking program.

Yes, the lending conditions will not be as favorable, but you don’t need to collect a lot of documents (compared to an investment loan), meet fairly stringent requirements and wait a rather long period for a decision. Many businessmen, especially individual entrepreneurs, prefer to do just that!

Types of investment loans

Investment loans are divided into several types.

Loans by investment object:

• Project - allocation of funds for the implementation of a specific project;
• Expansion - lending to an existing business in order to expand its borders or to open a branch in another city;
• Construction – investments in the construction of residential or commercial real estate.

Loans by loan term:

• Short-term – up to 3 years;
• Medium-term – from 3 to 5 years;
• Long-term – over 5 years.

Loans by lending frequency:

• Disposable;
• Credit line. Funds are allocated according to the stages of the business plan (cyclically) or seasonally (for example, in agriculture).

Loans are also classified by economic sectors and investment objects (working capital, labor assets, etc.).

General points

The essence of an investment loan is to borrow the necessary funds to invest in your own business. It could be anything - opening an enterprise, firm, factory, etc.

It is difficult to call the process of obtaining such money easy. The borrower-lender relationship requires a lot of knowledge and laws on the topic. Such knowledge especially concerns the client.

What it is

An investment loan is one of the types of services of banking organizations, the main purpose of which is to help the development of any business project.

This type of lending is intended for trade entrepreneurs, individuals and legal entities.

Owners of any enterprise often use credit services in order to make better conditions for their business or create production from scratch.

An investment loan is used for:

1. Purchasing new equipment for the company.
2. Organization expansions.
3. Project implementation.
4. For the reconstruction of the building.
5. Re-profiling of the enterprise's activities.

Where to contact the borrower

Unfortunately, not every person can contact a banking institution, or a personal account on the bank’s website, in order to receive an investment loan.

Only a person with extensive experience in entrepreneurial activity can draw up an agreement to receive a loan of this type.

An investment loan is a large sum of money for a very long period. A client who wants to receive such a loan must meet certain requirements:

1. Be a person who has managed the company for at least 12 months.
2. Have a positive credit history.
3. The company must be located in the same region where the financial institution is located.
4. It is necessary to provide collateral in the form of movable or immovable property.
5. Be an adult citizen of our country.
6. Have a source of permanent stable income.

The peculiarity of an investment loan is that the financial institution checks not only the borrower, but also the project in which the entrepreneur wants to invest the borrowed money.

Legal grounds

Investment lending is one of the activities of banking organizations, which is necessarily controlled by Russian legislation.

The regulations stipulate all the rights and obligations of lending participants, as well as the main rules for conducting this transaction.

Some financial institutions, unfortunately, do not adhere to the rules of the law and deceive the client, requiring him to perform actions that are not provided for by law.

Civil Code of the Russian Federation No. 51-FZ, which came into force on November 30, 1994, is considered the original law that regulates lending in the Russian Federation.

All banking institutions, microfinance organizations and other companies involved in lending are guided by this law.

Also, in no case should the following Federal Laws be left without attention:

The Federal Law “On Consumer Credit” regulates all legal relations that in any case arise when transferring a loan to an individual for purposes that are not related to the enterprise.

Requirements for the borrower

Investment loans are accompanied by great risks for any lender, therefore increased requirements are imposed on the borrower:

• Availability of a business plan. The project is clearly and in detail described and contains a plan for the rational use of invested funds. It is based on sound economic calculations. The plan should not have a fantastic component (for example, a flight to Mars or the creation of an expedition to find the missing money of Pablo Escobar);
• The borrower must be solvent. If a legal entity applies for a loan, it must provide accounting statements and financial documents confirming profitability. It is required to provide valid licenses, a list of counterparties with contracts, information about employees, and an analysis of receivables and payables. If this is an individual, the lender analyzes his reliability and solvency. Here you will need information about your work activity, credit history, information about your current social status, and an analysis of monthly income and expenses.
• Availability of funds for investment. The lender will issue a loan only if the client covers part of the required amount for the project with his own funds. The percentage can range from 25% to 50%.
• Pledge. Such loans are classified as collateral. Any property that can be quickly sold in the event of project failure is suitable as collateral.
• No debt. The borrower must not have outstanding debts to the state, creditors and credit institutions. He also must not have previously gone through bankruptcy proceedings. The borrower must have a good credit rating at the time of borrowing.

Important! Each lender has the right to put forward additional requirements for the borrower. You should find out about them in advance in order to prepare the necessary package of documents.

What it is

This is a certain way of borrowing money that allows entrepreneurs, as well as owners of large, medium and, less often, small businesses, to improve their production process and develop their business.

An investment loan is one of the types of lending, the purpose of which is to help develop the business of a specific client.

The last one could be:

1. The owner, that is, a citizen, is quite rare.
2. The enterprise itself, that is, a legal entity.
3. Individual entrepreneur.

This loan is issued on the basis of an agreement. The parties to this document are:

That is, an investment loan agreement is a tripartite agreement to invest funds and receive a certain amount of profit.

As a rule, the objects of this type of borrowing are:

• construction projects;
• manufacturing enterprises;
• equipment, machines and units.

It is worth understanding that no investor will simply invest their funds in the development of any project. A clear business plan is needed. The responsibility for its preparation falls on the shoulders of the contractor.

In addition, confirmation of his current financial status is required. As an alternative to securing a loan, you can offer to take out a mortgage on property or business.

Legislative acts

Like any other type of borrowing, an investment loan is regulated at the legislative level.

When drawing up this type of agreement, it is worth taking into account the following legal norms:

1. Federal Law “On investment activity in the Russian Federation” dated February 25, 1999 No. 39-FZ.
2. Paragraph 1 of Chapter 42 of the Civil Code of the Russian Federation.
3. Tax Code of the Russian Federation.

Taxation

At its core, such a loan is a type of investment activity. Therefore, the Tax Code of the Russian Federation provides for some tax benefits.

These include:

Requirements for the borrower

To receive a certain amount for business development, you must meet certain requirements. This:

Video: tax investment credit and procedure for its provision

Required documents

List of required documents:

• loan application;
• business plan;
• copies of documents confirming state registration of a legal entity, for an individual - a copy of a passport;
• constituent documents of the company applying for a loan;
• if the borrower is the sole owner of the enterprise, a document confirming ownership will be required;
• copies of financial and statistical reports for several years.

At the request of the lender, the list of documents can be expanded.

Where can I get it

In accordance with the laws of the Russian Federation, an investment loan can be obtained:

• from the state. Currently, several federal programs have been developed to subsidize and invest in small businesses and private entrepreneurs;

Naturally, strict requirements are put forward to the customer in developing a detailed plan for the upcoming project or business. Age restrictions may apply.

• in a credit institution (bank). Some banks have their own programs and funds intended for investment. To receive funds, you will need to collect a large number of documents confirming the performance of the company and the benefits of the project being implemented. Most credit institutions prefer to cooperate with companies that are already operating stably. But getting an investment loan for start-up organizations is quite difficult.

An additional priority in obtaining the required amount of money may be the presence of a bank account for the borrowing company.

• in an investment company. Some people with sufficient free funds join together in companies. The purpose of such an organization is to invest. Qualified employees of the company thoroughly check the proposed projects and invest in the most promising ones. Similar organizations can be found in any city. The Internet is an assistant in searching;
• in any organization directly interested in the implementation of the proposed project. You can get an investment loan not only from credit or specialized organizations. An investor can be absolutely any firm or company;

The main thing for the customer is to convince the organization’s management of the need to invest in a certain project and offer contract terms that are beneficial for both parties.

• from a private person. In addition to organizations, investors can also be any individuals. You can search for an interested investor among your loved ones or acquaintances, as well as on specialized websites on the Internet;

When choosing an investor, one must base it on the honesty and integrity of the person or organization. Most often, money is invested in interesting and economically profitable projects. This is due to the main purpose of investment activity, which is to make a profit.

Features of an investment loan agreement

The main document confirming receipt of a loan is an agreement, which must be drawn up in writing. An oral agreement is allowed when receiving from an individual an amount of no more than 10 thousand rubles.

The text of the agreement is drawn up on the basis of Art. 807-810 of the Civil Code of the Russian Federation.

A correctly drafted credit agreement contains information about the parties to the transaction:

• For a legal entity - full name, information about documents confirming state registration. The details of the authorized person signing the transaction document are also required.
• For an individual – full name (full name), information about place and date of birth, TIN code, passport details, registration information.

Information about the subject of the loan is also indicated. The subject of the transaction is cash. The exact amount is indicated in numbers and words. The currency must be indicated. If the loan is issued in a foreign currency, it is necessary to indicate its official exchange rate on the date of signing the agreement.

If the subject of the loan is not money, but things, then the text of the agreement must indicate their value, having previously carried out an expert assessment. The subject of non-monetary agreements can also be securities.

The document specifies the terms of the loan:

• term;
• special purpose;
• interest rate;
• repayment procedure and deadline for complete closure of the debt obligation.

You can also specify additional conditions:

• duties of the parties;
• liability for violation of the terms of the contract;
• force majeure;
• pre-trial dispute resolution;
• reasons for filing a lawsuit;
• the possibility of terminating the contract unilaterally;
• possibility of prolongation or early repayment of the loan.

The document must contain the details of the parties, as well as signatures and seals.

The subject of the security is described in the agreement or, at the request of the parties, a separate pledge agreement is prepared.

Important! If the borrower provides real estate (building, land, apartment or cottage) as collateral, information about this must be entered into the Rosreestr database.

How to draw up and conclude a contract correctly

In order to conclude an investment loan agreement on optimal terms, specialist advice may be required. The average person often has many questions that are almost impossible to answer on their own.

When concluding an investment loan agreement, it is important:

• know all the parties entering into the contract and check the legality of the activities of each of them;
• clearly understand what investment funds will be spent on;
• stipulate in advance what the interest rate will be when investing, and how and for what period the investor will receive income from the invested money;
• develop a project plan as accurately as possible and strictly follow its points;
• develop measures in advance to ensure the fulfillment of the obligations of each party. Provide for a set of penalties that will be required in case of non-fulfillment or poor performance of undertaken obligations.

It is advisable to have an investment loan agreement, like other similar documents, certified by a notary. Any additions to an existing agreement can be made solely at the joint request of the parties and in the form of additional agreements.

What are the main conditions for an interest-bearing loan agreement to a founder from an LLC, see the article: sample loan agreement to a founder from an LLC. How to get a loan online from the Home Money company, read here.

Advantages and disadvantages of investment loans

An investment loan is a promising option for expanding, modernizing and developing new areas of your own business. Unlike investments, it is easier to obtain additional resources without attracting new people to manage the company and further return part of the profits.

However, obtaining a loan requires the preparation of a huge number of documents, compliance with strict requirements of the lender and the availability of collateral.

For an entrepreneur to receive a loan of up to 10 million rubles. It’s easier to get a regular consumer loan or contact a microfinance center. Interest rates on investment loans are not much lower than usual rates on other bank loans, and the conditions for their provision are simpler without mandatory collateral.

Will my money be liquid, will I be able to quickly withdraw it if necessary?

Moreover, ask for a calculation using real numbers (this is very important). For example, this way - if I deposit 1 million rubles in three years, how much can I withdraw if necessary after three years?

Low liquidity is not always bad. Sometimes it is better to put money in an illiquid instrument in order to hide it from yourself and not spend it.

But if investment liquidity is important to you, ask this question. Otherwise, you may not only not receive any income, but also lose a significant part of your capital.

Example

After the end of the deposit, the bank invited the 62-year-old client to open a savings life insurance program with the promise of income greater than the deposit rate. For a period of 10 years. The client will need to transfer 300,000 rubles annually to this program.

At the same time, the client no longer works and will invest her pension money in the program. She opened the program on the advice of a bank manager.

During a meeting with our consultant, she told us about this “wonderful” program. The consultant asked her if it could happen that she would need this money in a couple of years? She replied that she was already 62 and of course she could need money at any time.

The consultant showed her by example that if she receives money from a savings or investment insurance program ahead of schedule, she can lose up to 80% of her capital.

The result is that the client went straight from our office to the bank manager to terminate the contract while it was still possible.

Conclusions:

1. Low-liquid life insurance and life insurance programs can only be offered to those who need a life insurance policy and who invest for the long term.
2. Low-liquid life insurance programs are definitely not suitable for people over 50 years old - they are very expensive for them.
3. NSL and ILI programs are not needed for those who are only interested in investing and not life insurance.

Second question

Features of obtaining an investment loan by individual entrepreneurs

Despite the fact that individual entrepreneurs are full-fledged business entities, they encounter difficulties with lending more often than other participants in the economic sphere. This also applies to obtaining investment loans. If the individual entrepreneur and the legal entity have equivalent business plans, banks will give preference to the latter. There are a number of good reasons for this. The financial documentation maintained by the individual entrepreneur is so short that it is difficult to use it to determine the solvency of the applicant and make an economic forecast.

To receive a loan, an individual entrepreneur must be ready to:

• undergo a thorough check and prove your worth;
• provide accounting, tax and other types of mandatory reporting for two years for the audit.

In addition, the business income must be sufficient so that after repaying the loan the individual entrepreneur does not go bankrupt and can continue to operate as usual.

That is why a novice businessman has practically no chance of receiving investment loans to create a business.

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THIS IS A MISTAKE, which can result in huge losses or other troubles for the client. Because none of the proposed instruments are similar to a deposit in terms of their characteristics.

Therefore, before buying what was offered to you, ask the manager THREE clarifying questions. If even after answering these three questions you still have doubts, ask the bank manager to send you their written proposals and contact independent consultants for a third-party opinion.

Believe me, it will cost you much less than making the wrong decisions.

SO, here are these three questions.

First question

Investment deposits in banks

To open an investment deposit in a bank, you should be especially careful when choosing a financial institution. Weigh the pros and cons". Decide if you are willing to take risks. I have prepared a list of the most experienced banks with optimal investment conditions.

Investment deposit in Sberbank

Bank clients can set the term of investment in shares of investment funds, one part of the funds is deposited, the other part is sent to the mutual fund. The ratio of shares can be up to 50 to 50%. The interest on the deposit portion is from 7 to 12%, depending on the amount you deposited. The minimum investment amount is 100 thousand rubles, the deposit period is from 1 to 3 months, in shares there is no time limit. Deposit replenishment is not provided. Mutual funds can be replenished by purchasing additional shares. Early withdrawal of deposit funds is allowed; the agreement provides for a “Demand” interest rate of 0.01%.

Investment deposit in Rosselkhozbank

Clients of this bank can open an investment deposit in rubles or dollars while simultaneously purchasing mutual fund shares in a 50/50 ratio. The deposit period is six months or 1 year, and the interest rate is from 8.15 to 8.45% if your deposit is in rubles and increases with the amount of the deposit. Replenishment is not provided. The minimum amount is 50 thousand rubles or 1 thousand dollars. Early termination of the contract provides for a “Demand” interest rate of 0.01%. VTB 24 has similar conditions, but the minimum deposit amount there is 350,000 rubles.

Investment deposit in Gazprombank

Gazprombank clients have access to investment deposits in rubles, dollars or euros. The minimum amount of a ruble deposit is 25,000, in dollars and euros - 500 currency units each, with the simultaneous purchase of mutual fund shares up to 100% of the deposit amount. Terms - 3, 6 or 12 months. There is no possibility of withdrawal or replenishment. The interest amount grows along with the deposit amount. Early withdrawal of deposit funds is allowed; the agreement provides for a “Demand” interest rate of 0.01%.

Conditions for opening an investment deposit

Any banking organization will open an investment deposit provided it has its own management company. The activity of the management company is the purchase and sale of shares of investment funds. Special requirements are imposed on the investor. What are they?

Depositor's age of majority

At the time of making an investment deposit, the investor must be at least 18 years old. Coming of age means a conscious risk of consequences in the form of financial losses. In addition, it involves the contribution of own funds. So, if you are already 18, you can read on, but if not, you will have to wait.

Official employment

Any financial organization, in fact, does not care where you got the money. However, the lack of official employment is a guaranteed refusal to accept investment funds. The Bank reserves the right to monitor the financial position of the depositor for the legal receipt of funds - a measure aimed at suppressing the illegal circulation of payment notes and economic crimes.

Russian citizenship

Investment activities are subject to tax. Taxes must go to the state treasury. Taxes are levied on residents - legal entities and individuals who have the right of permanent residence in Russia. That is, lack of citizenship is a reason for official refusal to open an investment deposit.