Arnon Dror is one of the most successful businessmen in the world of global finance. His illustrious career spans over 20 years. During this period, he has been able to accumulate a wealth of in-depth experience. He also has the distinction and honor of being the Vice-President of many creditable international companies. These organizations include Xerox, Creo Inc., Scitex, Kodak, Creo Americas and Presstek. The officials of these concerns credit him with successful devising and implementing their reconstruction programs. People are not familiar with this expert just need to browse through his impressive track record. They come to know the truth of this statement. They’ll also come to know he specializes in many diverse fields. These include international taxation, IT systems, internal controls, ERP integration, corporate mergers, and cash flow management.
Arnon Dror – What do entrepreneurs need to consider when taking commercial loans from banks?
This financial expert says entrepreneurs need to take loans from commercial banks for obvious reasons. The money these businessmen get from such institutions helps them to conduct their activities without any hassle. They could use the funds to overcome a cash crunch situation, expanding their market operations or buying new equipment. However, they need to ensure they generate adequate revenues from their assets. This income should be enough to pay off such debts within a short period. Otherwise, they could find themselves in trouble. This is the last thing these proprietors want. On top of this, they got to keep in mind the following 3 important factors:
- Providing adequate collateral
Arnon Dror explains officials of commercial banks provide entrepreneurs with loans under one condition. These businesses should be able to offer them a suitable asset as collateral. The lenders resort to this course of action to protect the interests of their establishments. In case, the proprietors are unable to pay off their dues; the financiers can forfeit the asset. They then sell it in the open market for a reasonable price. This enables them to recover their losses.
- Complying with stringent requirements
Commercial banks generally lay down very stringent guidelines when it comes to offering loans to businessmen. The officials of such establishments take such a step of a reason. They have to ensure the borrowers are capable of repaying money they lend them. For this, the proprietors have evidence to prove they are operating profitable concerns. Only then do these businessmen get the funds they require. This is why they need to fill up the necessary paperwork and produce the relevant documents. Otherwise, they won’t get the cash. Entrepreneurs need to be aware of this fact.
- Select the right lender
Entrepreneurs need to know that there are numerous commercial banks in the market. Not all of them provide the same service to the public. These businessmen need to choose an establishment whose officials can cater to their specific needs. Only then can these proprietors expect the results they are looking for. If this is not the case, they should keep their options open.
Arnon Dror says commercial loans are a necessity for entrepreneurs rather than a luxury. Such funds can help them with market expansion activities or overcome financial difficulties. When choosing the right lender and scheme, they got to consider the above 3 important factors.