What information does the bank require in order to process a loan request for operational financing?

When a bank is assessing whether you and your business are creditworthy, they often require extensive documentation that can be difficult to obtain. New technology makes this process much easier.

The loan terms you offer depend largely on how the bank assesses the risk of loss. The bank must therefore map the company’s business model, profitability, stability and operating history. The bank places requirements on equity and security, both of which are important aspects that need to be carefully considered. For example, the bank can take collateral in assets such as real estate, operating accessories, accounts receivable and inventory, all with the purpose of accumulating sufficient collateral for a loan.

 

The bank’s requirements for documentation

loan request

For the bank, documentation is about getting the most comprehensive picture of the company applying for funding. To assess the customer’s ability to pay, the bank needs access to the company’s accounts. The annual accounts are presented after the end of the year and are rarely completed before the second quarter of the year after the accounts have been closed. Then they should be made public. This means that banks often have to rely on old accounting information, which at the time of the credit rating is not as relevant. Furthermore, the financial statements provide a snapshot on the last day of December. For many companies, the financial statements presented do not give a correct picture of the operations.To compensate for this, one must then spend some time extracting and analyzing other data,

The bank is also committed to setting a repayment plan that is feasible and fits the company’s business model. In order to obtain security for the company’s liquidity, the bank needs insight into how the company’s cash portfolio is affected over time. This is best done through a good and well thought out liquidity budget.

 

A key aspect of operating finance is to secure the company’s turnover

A key aspect of operating finance is to secure the company

Here, the company’s claims volume is a good indicator. The bank looks for companies with a good spread in the loan portfolio, that is, the company’s future earnings do not depend on a few large customers that make the company vulnerable to customer loss.

Furthermore, the customer’s solidity and payment history are important. In this connection, the bank may request or conduct a credit check of the company’s counterparties as well as request insight into billing routines and payment terms.

When it comes to more complex financing, such as acquisition financing, the bank will require additional documentation than described above. This may include liquidity forecasts, budgeted projections of results and other relevant information.

 

This is considered by the bank as risky when financing accounts receivable

loan financing

When financing receivables, the bank is particularly concerned with analyzing the receivables of a potential customer with a focus on counterparty risk, ie the risk that an invoice counterparty cannot settle the claim. This analysis can reveal a number of risk factors, such as:

  • Customer payment history. Does the customer pay for maturity, or is it a pattern where some customers always pay too late?
  • Companies that have their customer base in industries with a high probability of bankruptcy
  • Customer sub invoices as part of a project that has not yet been completed or advance invoices for goods or services that have not yet been delivered to the invoice recipient
  • Since the bank takes collateral in outstanding debts, it is also necessary to check that the claims are real. For example, traditional factoring companies can call the counterparty and request confirmation of the validity of the invoice
  • Spread risk is also a factor the bank considers. A business that has few and large invoices outstanding with a small number of customers will have a greater risk per claim than a company that has smaller amounts outstanding with several

Providing all this information and documentation can be a resource-intensive process for both the bank and the company seeking funding. It can be a burden for the company to constantly respond to bank requests, and there may be little optimal systems in-house with both parties that delay processing further.

The solution to this could be to digitize the processes.

 

Digitized processes in the banking industry

Digitized processes in the banking industry

The Norwegian financial industry has been early in using digital technology, something the central bank governor has highlighted in the annual figures for 2018. Although payment solutions such as Vipps are often cited as an example in this type of context, digitalization has also helped to make financing easier in the corporate market.

Best Bank has chosen to connect directly to the customer’s cloud-based accounting systems to obtain updated accounting information. Where we previously had to ask the company or corporate accountant to put together a preliminary annual report or updated figures on developments so far in a financial year, we have streamlined the process by extracting real-time data.  

Retrieving relevant accounting data directly through a connection to the accounting system provides the bank with a much better basis for conducting a credit analysis and we do not need to bother the customer with time-consuming manual processes. This means that both the processing time is reduced considerably and that the customer does not have to report on an ongoing basis because the bank continuously coordinates the development itself through access to the accounting system.

 

Digitized operational financing enables flexibility

money loan

The ability to use large amounts of data in investment and credit assessments has increased significantly in recent years. This has enabled the bank to make more precise assessments and to simplify the process for the customer. One result of this is that the bank can offer very flexible solutions for operational financing and liquidity management.

At Best Bank we have the Whitepage operating credit solution. Through this product, we offer a flexible credit framework where you can lend your loan portfolio. Because we rely on real-time data, the credit limit can be updated every 24 hours. The frame swings in line with the claim mass and is predictable. The application and creation process is simple because everything is done digitally.

Finance prams, children’s clothing and baby gear with credit cards

If you have just had a child, you probably have already found out that it is not quite cheap. The extra expenses begin already during pregnancy and continue for many years to come. You can get help with getting everything you need by getting a credit card.

You can get credit cards for the purchase of strollers, toys, baby equipment, children’s clothing or other things. We help you find the right card for you so you can save the most money.

 

Credit card for stroller, children’s clothing, etc.

Credit card for stroller, children

In the overview below you will find credit cards for prams, children’s clothes, baby equipment etc. Check the companies and find out which card is best for you and your needs. You must also ensure that you can meet the company’s application criteria. Once you are sure of both, you can submit an application online.

First and foremost, a credit card gives you the opportunity to spend money that you don’t have yet. Most cards have a payment-free period, where you do not pay interest on the amount spent. It means that you can afford something here and now, even if you only have the money next month. You can use this solution whenever and wherever you want, and it gives you great flexibility as a consumer.

For example, you can use your credit card for prams and only pay the money in 30 or 45 days. After this period, interest will come on the borrowed amount, but this interest rate may be low compared to other options.

Many companies also offer you regular discounts on a wide range of stores and online stores. You can use this to your advantage and save a lot of money on different goods purchases. We help you find a credit card, which you can use to save money on products for your baby or your child. With us you can easily compare the possibilities and choose the card that best suits your needs.

 

Compare and search credit cards with us

credit cards with us

Use the chart above to compare your options. You decide for yourself what is most important to you. But we recommend that you look at the length of the pay-free period, what max. the amount is and how high the interest rate is. In addition, you can advantageously look at the various discount schemes that the company can offer. It can be CashBack, fixed discounts, points or similar.

It can be time-consuming and difficult to do this on your own, which is why we’ve made it easier for you by creating these listings. Submit an application through us or on the company’s own page and get your credit card for stroller already tomorrow.

Buy used and save a lot of money

save money

There are also other ways to save money on clothes and gear for your child. You may well choose to buy some of the things used. Children only wear clothes for a short time because they grow so fast. Therefore, you can find lots of nice, used clothes in good quality on the market. Of course, you can also see if you know friends or family who have older children. This way you can save a lot of money compared to buying new clothes and toys every time.