The corporate call is a credit assessment and debt-retroactivity process for the principals of the business and an important indicator of the personal credit of the shareholders and executives of the enterprise. The poor results of letters of credit can have a significant impact on the business development of enterprises and on loan applications, and therefore the role of corporate letters of credit is crucial from the perspective of business loans。

It's a corporate call. Can companies borrow

Impact of letters of credit on enterprise loans

Businesses need to meet their own financial needs by lending to banks, which can have an impact on business loans when personal letters from business owners arise. In the event of poor credit results, banks will grant strict approval for loans to enterprises, it will be difficult for banks to believe in the solvency of the owners or shareholders, and the amount of the loans will be limited, and even applications for loans will be rejected. In addition, even if the loan is successful, it may result in high interest rates and a heavier burden for the enterprise as a result of poor credit。

II. HOW TO RESPONSE TO TRANSFER

Risk reduction through additional co-loans. If other shareholders or executives are in a better position of credit, they can participate in the application for a common loan, thereby increasing the level of bank confidence in the company's loan and reducing the interest rate on the loan. It needs to be noted, however, that common loans also require the return of all loans, otherwise the credit of each person will be affected。

2. Provide additional guarantees to reduce bank risk. Protection measures for loans can be increased by providing assets, bonds, etc., to reduce the risk to banks and to increase the level of trust in loans。

3. Actively correct the problem of letters of credit and improve credit ratings. It is very difficult to resolve the problem of bad faith, which requires the entrepreneurs to correct it in a timely manner and to improve their credit records. The timely repayment of outstanding arrears, the maintenance of a good credit record, etc., can, over time, increase the credit rating of individuals and the creditworthiness of enterprises。

III. OTHER PRESENTATIONS

In addition to bank loans, enterprises may obtain loans through other means. The current integration of Internet finance with traditional finance provides SMEs with more access to credit. Many Internet finance platforms not only have low-cost access to credit but also lower the credit threshold for enterprises. It needs to be noted, however, that Internet finance also needs to be risk-sensitive, especially with regard to unregulated platforms。

Summary

The impact of corporate letters on enterprise loans cannot be ignored, but it is not the enterprise that cannot lend. Businesses can respond in the right way to improve their credit ratings, while they can also obtain loans through Internet finance, etc. Entrepreneurs should value and protect their credit records and consider their development from a long-term perspective。