|
Industrial loans are secured loans
offered and availed commonly to, by manufacturers and
industrialists. When talking about industrial loan, most
common borrowers are small, medium to large industries.
Industrial loans are for the purpose of financing the
purchase of additional plants and machineries that
can be used for production of
goods or
acquisition of service. An industrial loan is sometimes
mistaken to business loans. Actually industrial
loans are like business loans but with a larger scale or
larger scope.
Industrial loans are long term in nature. It gives
manufacturers enough time to regain their investments
and eventually repay. And like any other loans,
industrial loans repayment method is on equal
amortization basis. Industrial loans factor of approval
depends on many causes.
|
 |
|
The following
items are vital in assessing a borrower applying for an
industrial loan. The firm’s quality of management, the
firm’s detailed trend of production, trade sources
reports, other bank’s reports and borrowers earnings
over the year.
The firm’s quality management has the greatest impact,
because how well the firm is handled may also be the
same way that other obligations like loans will be
handled. Other factors that will make a firm big or
small also depend on how its management is handled like
the trend of production. The firms’ trend of production
is another vital matter that lenders look into. Because
the detailed trend of production shows how a firm
products are saleable, or how demanding the firm’s
products are.
When the detailed trend of
production shows how fast the firm’s products are sold
in the market, then it can easily be said that the firm
may incur great income. Because the faster and demanding
the firm’s products are, then the more it is known to
the consumers, making it more stable as a firm. Also
reports from trade sources are equally important in
assessing a firm for approval of industrial loan. Trade
sources show how the borrowing firm has a good
reputation in its trade. It shows how the trade sources
treat the borrower. In finances however, other banks
reports and borrowers earning over the year also plays a
big role in granting credit to industrial loan
borrowers. What the other bank report says shows that
banks capability and history in managing its finances.
Other banks report is the primary source of how to know
the borrowing firm’s finance management.
Lastly, with great importance as well, are the
borrower’s earnings over the year. By looking on this,
it shows the way how many borrowings have been, how it
is repaid, and what are the chances in that the borrower
may pay.
After reviewing summing up all the factors, the lender
then weigh the positive and negative points then make a
decision.
Industrial loans are among the important types of loan
as it helps increase production and therefore,
eventually helps in gaining, and adding income to the
economy.
|
