Do you need a lot of capital for business purposes? Investment credit is the answer. Investment credit is a form of loan that a bank provides to a client for the purpose of developing the client’s business.
However, before the bank finally accepts this credit application, the debtor must meet some conditions and cannot simply apply. In addition, as a debtor, you also need to know certain things related to your next loan, such as interest rates.
Therefore, Prospect has put together all the information, including features, application methods, investment credit characteristics, and examples. You don’t have to prolong it. Check out the reviews below.
What is Investment Credits?
The definition of investment credit is a capital loan in the form of money given to a borrower for a variety of business purposes over a period of time. In this case, investment credit is usually sent through a bank.
Loans offered vary in duration or terms, at least one year. However, banks usually offer 10 to 15 year offers. If the borrower is unable to repay it until the term expires, it is usually given a grace period of up to 4 years.
In addition to being used by large corporations and large corporations, the procurement of investment credit programs is, in fact, to assist business people from small businesses to large corporations. If you are looking to open a small business, a small investment loan can be the best choice.
A small investment loan is a loan with a short loan period and a special loan program for small and medium-sized enterprises. The procurement of this program is the result of the consideration that not all of them can build large and complex businesses.
Sounds similar, but the difference between investment credits and working capital credits lies in the designation and duration. Working capital loans are commonly used to meet the costs of short-term needs such as debt repayment and employee salaries.
In addition, considering the interest rate on an investment loan is something you need to consider before applying for a loan. Various of interest rate. According to the BPS as of August 2021, interest rates on state-owned banks are 8.6%, local banks are 9.67%, state-owned private banks are 8.55%, commercial banks are 8.58%, and foreign banks and joint venture banks are 6.58%.
Investment Credit Characteristics
In summary, investment credit has several characteristics:
- Include programs from government
This credit is usually adjusted for government programs for small to large business development. You can also promote business activities that further expand your job openings.
In addition, the characteristic of investment credit is productive. This is because the use of capital provided by investment credits is to improve the productivity of the business or business in the form of repairs or additional tools and materials.
- Under the supervision of the central bank
Finally, a characteristic of investment credit is that it is overseen by the central bank. Because this financing program aims to meet capital needs and their development, the central bank or central bank has the task of overseeing investment credit.
Investment Credit Function
The function of investment credit is to help Indonesian people get capital in the form of money. Whether to build a new business or develop an existing business in several ways, such as tools, machine updates, raw material procurement, etc.
Expectations for investment credit are that Indonesia’s economic situation will improve and state income will increase.
Investment Credit Application Requirements
If you are interested in applying for a loan, here are some of the requirements for applying for investment credits.
- Integrity of individual documents
- Integrity of company documents
- Feasibility study or feasibility study
The feasibility study is performed by a unique team based on actual surveys and results demonstrating the ability to pay in installments. This is intended to give the bank an overview of the potential benefits of your business.
- Loan amount according to ability
Since the investment credit payments are the result of your business profits, you need to make sure that the amount of the loan submitted depends on your ability to repay in installments.
Also, be aware of the restrictions or restrictions on the funds that can be borrowed from the target bank.
- No other bank loan has been applied for
We do not recommend applying for loans from multiple banks. This is because the bank measures your solvency. Therefore, if you have dependents at another bank, your application may be rejected.
Investment Credit Example
Based on its capabilities, there are three examples of investment loans.
If refurbishment is needed, loan funds can be used to finance the refurbishment of the building.
- Purchase a new tool or machine
For more effective and efficient productivity, using loan capital to buy new tools or machines is an option.
- Construction of new factory
Want to build a new factory and expand your business? You can also use this as an excuse to apply for investment credits.
Investment Credit Payment Method
There are at least three ways to pay your investment credits.
- Term loan
Payments are made in stages, that is, in installments / installments.
- Term loan grace period
Usually also abbreviated as TLG. In other words, it is a payment made by paying only interest. Then, when the grace period begins, payment of the credit principal will begin.
- Term loan principal
Like term loans, TLPs are installments and the monthly amount is always the same. The interest amount is then determined based on the unpaid amount.