Small business loans: frequently asked questions

What is the difference between the Programme for Small and Medium-size Business Loans and the usual lending schemes?
As a rule, small and medium-size business loans differs from standard corporate loans in that a shorter term is required to consider loan applications and that the approach to collateral is more flexible. Furthermore, in the case of small and medium-size business loans, Borrower activity is analyzed on the basis of data reflecting the Client’s actual business status, and no independent evaluation by licensed appraisers is required of the assets pledged.

Does the Credit-Moscow Bank Programme differ from those of other banks?
It certainly does. One of the advantages of the Credit-Moscow Bank Programme is the shorter period required to consider your loan application. Applications are considered within 3 days after Client submits the minimum required documents. In addition, we take a flexible approach to pledge: for example, we are ready to accept the Borrower’s personal property, or property belonging to the Borrower’s relatives or third parties as collateral.

Is it possible to use this programme to obtain a loan for setting up a business?
Unfortunately, the Credit-Moscow Bank Programme for Small and Medium-size Business Loans does not allow you to obtain a loan for setting up a business. We suggest that you start by opening an account at our Bank, and after 6 months you will be able to apply for a loan under the Programme.

For what purposes can a loan be obtained?
If you obtain a loan under the Credit-Moscow Bank Programme for Small and Medium-size Business Loans you do not have to state the loan’s intended use. As a rule, however, loans under this programme are obtained by entrepreneurs for the purpose of acquiring additional equipment, increasing inventory and turnover assets, and investing in commercial real estate.

Is it possible to obtain a pledge-free loan?
Yes, it is possible to obtain a pledge-free express loan against a guarantee from the business owners.

Does the Bank take into account unofficial business profits, i.e. when the Client’s financial reports submitted to the tax authorities state “zero”?
When passing approval on a loan application for enterprises and individual entrepreneurs, the Bank looks at the Client’s financial management reports. If the Client presents “zero” reports only, its chances of obtaining a loan decrease.

Can the payment of a loan be deferred?
Yes, the payment of a loan can be deferred for a term of up to 3 months.

How long does it take for the Bank to issue a decision on the loan?
A decision is made as to whether a loan application will be honored within 2-3 business days upon submission by the Client of the minimum required documents. As a rule, these documents are on-hand.

Can the Borrower change its pledge during the loan term?
Yes.

Can a loan be obtained in cash?
A loan is issued by transferring the requested funds into the Borrower’s account at Credit-Moscow or any other bank. The Borrower can receive these funds in cash by withdrawing them from its account, in accordance with the bank’s tariffs.

Do Clients who wish to obtain a loan have to submit a business plan?
To obtain a loan under the Credit-Moscow Bank Programme the Client does not have to submit a business plan.

What is the loan interest rate based on?
The total interest rate for a loan is based on the loan amount and term.

What does a loan cost overall, including interest, commission and other payments?
The actual appreciation of a loan varies between 10 and 14% of the loan amount per annum, provided that the interest and loan body are repaid on a monthly basis and there are no delays in repayment.

Must the pledge value exceed the loan amount? If so, what should it be worth?
It has to, since the market value of the pledge must cover not only the body of the loan itself, but also the loan interest. It must also cover the Bank’s expenses related to the sale of the pledged asset, should the Borrower fail to repay the loan. The value of the asset securing a loan depends on the type of pledge made. On average it must exceed the loan and interest amount by 40-50% over 1 year.

What if the Client needs the vehicle and the goods pledged as collateral for his/her business activities?
If the Borrower pledges a vehicle, it does not have to be stored at the Bank’s parking lot. The Client may use the vehicle by providing the Bank with the original Vehicle Certificate. In the case of pledged inventory, the minimum balance must not fall below the value specified in the inventory pledge contract. Thus, obtaining a loan by pledging property or goods will not affect the Client’s business.

Can a loan be obtained in EUROS?
At present, loans under the Credit-Moscow Bank Programme can be issued in Roubles only.