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Citadele has issued 40% more loans to small businesses in the first four months of this year than last year.
The pandemic has not had a significant impact on companies’ ability to borrow – about half of small and medium-sized enterprises have a good credit rating, while the rest would be limited or even impossible to attract financing from banks, according to Citadele statistics. it has even slightly decreased. The share of refusals of financing has not increased either, however, the company’s liquidity still remains the main obstacle to obtaining a loan.
“We are often asked – has the pandemic reduced companies’ ability to borrow, or is the bank lending more prudently? No, our role is to be a reliable financial partner, and we are interested in supporting companies that want to grow. It must be emphasized that banks are always ahead of the pandemic. The company’s business model, ownership structure, management team and the company’s risk profile are important, so that turnover does not fall to zero, and the company’s ability to adapt to the situation.The fact that the pandemic caused short-term challenges does not mean that the loan will not be available. If a company is unable to meet its existing financial obligations, such as credit and tax arrears, a new loan will only create an additional burden that we, as a responsible financier, do not recommend to our clients.Timely planning, response, orderly financial flow and critical development opportunities help both businesses feel comfortable and increase the chances of receiving funding. Creditworthiness can be improved. Unfortunately, there are not many companies that consult before applying for a loan, “says the head of Citadele’s small business service department.
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