We scan overdraft loans for micro and small companies. The best bank loans in the current account are provided by Crediter, Lorota Bank and CreditCole.
We asked the banks how they would grant a current account loan to a company that has annual turnover above PLN 1 million and has been operating on the market for over two years. We took a look at the four cost parameters associated with granting the loan: the bank’s margin, commissions for granting and renewing the loan, and a commission for readiness. We assumed that the company is developing dynamically and meets all the requirements of a given bank. According to our parameters, the best loan is currently offered by Bank Crediter, which received 13.88 points out of 16 possible. In second place is Lorota Bank with 13.2 points, and the third – CreditCole, which scored 12.8 points.
Where’s the cheapest?
Bank Crediter offers a loan in an account called Spresks Line, the bank’s margin starts from 1.99 percentage points, the bank does not charge a loan, but 2.4 percent. annually is the commission for readiness, i.e. on unused credit. The commission for renewing the credit line is 1.49 percent. the amount credited. In a bank, a company can apply for up to 500,000. loan amount. Lorota Bank does not charge a fee for readiness, the commission for both granting the loan and its renewal starts from 0.25 percent, and the bank’s margin from 4.5 percent.
CreditCole also has no fee for unused credit, the commission for its granting amounts to 1.5%, and for its renewal from 1.25, the bank’s margin starts from 4 percentage points. In a bank, a company can get a loan of up to 400,000.
The interest rate on the overdraft facility is based on the NetBor (usually 1- or 3-month) rate and the negotiated margin. The average margin charged by banks is 4 percentage points. The margin in Idea Bank is 0 percentage points, but the bank charges 7.99 percent. commission for granting the loan and its renewal. Three of the banks included in the list do not charge any fees for granting loans: Crediter, Bank Peskor and s-bank. Most banks, however, charge a commission of 1.5%. amount of debt. Another cost related to the use of the credit line is the commission for renewing the loan. In many banks, it is the same as the fee for granting loans. In some banks it is much lower than the commission for granting the loan, for example in Bank Millennial or CreditCole. And in some of the opposite – the company will pay more for renewing the loan than its launch. This is the case, for example, in all banks that do not charge a fee for granting a loan: Crediter, Bank Peskor SA or s-bank. An additional charge for the credit on the current account is the payment for readiness, i.e. commissions for the unused loan amount. Its cost is about 0.2 percent. on a monthly basis. This fee does not charge 6 out of 17 listed banks.
The overdraft facility is granted for 12 months with the possibility of a prolongation for the next 12 months, provided that the company shows creditworthiness at a similar level as in the year of signing the contract, and the loan service was correct. The bank may terminate the contract with a company that has violated the bank’s regulations, and also if it has been entered into the database debtors list. If the contract is not signed for the next period, the company must repay the entire debt on the day the contract expires. Depending on the financial situation, the company may apply for a reduction or increase in the loan amount. Banks charge an additional fee related to the change of terms of the contract.
In most banks, a company transferring an account from one bank to another can basically get a loan on hand based on the account history of the transferred bank. Only at Lorota Bank will the loan be granted after 6 months from the transfer of the account.
The amount of credit depends on the company’s creditworthiness, but some banks set the upper limit for such loans. In s-bank and Crediter, it is PLN 500,000 PLN 400 thousand in CreditCole, and in Santander Consumer 300 thousand.. At Bank Peskor SA, the loan amount may not exceed 20%. the sum of sales revenues for the last financial year, and the BPS Bank is 25 percent. annual company revenues. In SGB Bank, this amount can not be more than twice the average monthly income on current accounts for the last 12 months and 20 per cent. revenues for the last full year (conditions must be met simultaneously).
The loan is most often granted for 12 months, with the possibility of multiple renewals. Fig. Adobe Stock
The final form of the loan agreement with the bank is an individual matter of the entrepreneur and the bank. It is worth negotiating both interest rates and commissions in banks.
A revolving loan in a current account can be used for any purpose, but the bank offers other loans. Banks offer entrepreneurs various forms of financing depending on their needs. To finance investments in banks, you can apply for an investment loan, a working capital loan is used to finance the current operations of the enterprise, and payment credits are a short-term loan granted to the company in order to maintain financial liquidity.
Technological credit is granted for the development of production technology. If the company implements a project for which subsidies have been granted, it can apply for loans in the bank until the reimbursement is obtained. Banks offer various preferential loans with subsidies, the entrepreneur may also apply for a mortgage. Most credit parameters are a matter of agreement between a bank and an entrepreneur.
How our ranking is made
Banks could get a maximum of 16 points. The points were granted linearly, ie the bank with the lowest interest rate received the highest number of points (in this case 17 points), but if the banks had the same parameters, they received the same number of points, and the next bank by 1 point less. Then each weight was given weight. In the ranking we have included:
– bank’s margins – maximum 5 points
– commissions for granting a loan – maximum 5 points
– commissions for readiness – maximum 3 points
– commissions for renewing the loan – maximum 3 points
If the banks did not provide the given parameter or the answer was supplemented by the “contract”, we took median (the center value) resulting from the given parameter for calculations for the purposes of the ranking.
Joanna Brzostek senior, manager in the business financing team at Bank Crediter
Microenterprises play an extremely important role in the economy. These types of companies make up the vast majority of all enterprises. Their efficient functioning on the market and the development of the company requires appropriate financing methods. They use their own funds and financing from external sources, for example from banks, to run their own business. Considering the size of such a company or the susceptibility to change, a large part of them is not able to find the necessary resources for proper functioning and development.
The way to solve these problems is to obtain external sources of financing. Undoubtedly, the most common source of financing for companies is taking out a bank loan. Deciding to finance in this form, one must take into account the need to meet various requirements set by banks that are testing the creditworthiness of the client. Such companies more and more often can count on an individual approach and receive offers tailored to their needs. However, before we decide on a specific loan, it is important to carefully analyze the company’s flows and to examine the demand for cash. If we take into account the purpose of the loan, we can talk about:
– revolving loans related to the financing of the borrower’s current business operations, such as a bank overdraft, non-revolving cash;
– investment loans for specific investment projects.
Banks, offering loans, not only try to propose an optimal loan period and amount for the company, but more and more often offer promotional, favorable price conditions to a wider group of customers that will help optimize the company’s operating costs.
Such an approach from the banks certainly facilitates the process of receiving financing and at the same time creates micro-enterprises conditions ensuring continuation of their operations and its development.