The European credit market plays an important role in external funding for large companies.
A skilled and well -developed loan agreement helps market companies create value for shareholders.
Long -term commercial debt companies allow companies to reduce capital costs, which has an impressive impact on the main factors affecting commercial value.
European banks in the EU and the rest of the world, which expand the geography of European trade, support major funding for investment projects and operating activities. We have provided financial services for moderate and large companies in Europe for many years.
ESFC Investment Crup is ready to offer your capital-intensive projects to provide large long-term trade loans to your capital-intensive energy sector, oil and gas sector, heavy industry, environmental protection, infrastructure, real estate and tourism.
Contact our representatives to know more.
What are long -lasting business loans: definition, facilities and international exercises
The principles of banking and business credit are created by the EU member states and the national law on pan-European economic needs and standards.
In many types of banking activities, European law separates the following:
- Issuing business loans.
- Determination and confirmation of bank guarantee.
- Open and confirm credit letters.
- Check and move the operation and operation with warranty.
- Bank guarantee etc.
The above activities can be carried out by banks, local or foreign bank branches, international financial institutions or other institutions authorized to do so on the basis of current law.
For financing large companies, banks are today the most important source of debt capital here, but the role of new financial instruments in recent years is increasing rapidly, and changes the landscape in the European market.
If they have a maturity of more than 3 years, commercial debt is considered long -term. Below we will look at long -term commercial loans, used by European companies to finance large investment projects spread over long periods of two decades or more than 3 years.
Criteria for business loans
The classification of banking that is available for trade in the European financial market can be based on many different criteria.
The most important thing is the following:
- The purpose of business loans.
- Method for issuing borrowed funds to the customer.
- Method of repayment of borrowed funds.
- Debt due and others.
Bank loans can be used to finance the company’s current activities or to finance the investment projects (in the latter case, long -term loans play a primary role).
Remember this criteria, experts separate two main groups of trade loans:
- Work Capital Loans, which are used to finance a company’s daily operations. This is largely a long -term nature loan that requires the terms of repayment of loans.
- Investment loans, which are long -term in most cases. Such loans are widely used for capital -intensive investment projects (eg construction of power plants).
The duration of the loan is an important criterion for classifying bank loans in the EU.
According to these criteria, experts often distinguish the following three types of business loans:
- Short -term loans released up to 1 year.
- Loan in medium term with maturation
Professional debt statistics and trends in Europe
Between the European banking sector, the epidemic and the economy, there is a concrete support for local businesses, which contribute up to 80% of all economic resources given to companies in Europe in recent years.
According to the European Banking Federation, the amount of lending to non-financial companies is now more than 10 trillion euros, which shows the stability of the region even under difficult conditions.
Large banks such as Intesa Sanpaolo, Deutsche Bank, Société Générale, Banco Santander, Crédit Agricole and GNP Paribas carefully coordinate their activities with European investment banks and other international structures. This allows local financial institutions to support the economy and complete the complex funding challenges of companies recently suffering from severe sanctions and increasing geopolitical tension on the EU’s eastern borders.
Debt -based trade financing is especially important in countries where bond markets develop relatively poorly.
The group includes Poland, Hungary, the Czech Republic and many others, where the corporate financing system is mainly based on banks.
Despite the emergence of the rapid development of economic technologies and the emergence of many new equipment for financing businesses, long -term trade loans have a great impact on economic development. The Netherlands, Portugal and Spain are now considered the most developed business loan market in the EU, although there is a clear decline in large indicators throughout the continent in recent years showing the recession in economic growth in Europe.
