All you wanted to know about loan refinancing (part 2)
Media Room

We continue talking about loan refinancing. Today Vahram Gevorgyan, “Sayat-Nova” Branch Manager, Ameriabank CJSC, will tell us about the opportunities that Ameriabank’s loan refinancing campaign creates for SMEs.

SMEs used to be our weak point. This crisis has made their position even worse, especially of those with outstanding liabilities. What do you offer to businessmen?

I would call SMEs the most sensitive point immediately reflecting all changes in the economy and financial situation. Therefore availability of financial resources and application of non-standard solutions are very important for SMEs. I agree that current difficult economic situation has made things look worse for SMEs, but still the demand for credit facilities among SMEs has remained. And that is not the consequence of the crisis, it’s rather the specifics of the sphere. SMEs have always had a growth potential, besides there are comparatively short-term needs of the business fulfilment of which constantly requires banking products (loans in particular). Here it is important to use banking products correctly. We are always ready to help the client to make a right decision, to choose the right product and term and if required develop a non-standard solution suiting the client’s business most.

Ameriabank launched a campaign offering to clients such product as refinancing of business-loans. Is your offer profitable enough to pass through the whole lending procedure once again and spend time on it?

Definitely yes. Let’s see what this product actually is. Business-loan refinancing enables clients having loans with other banks to bring them to Ameriabank and get more favorable terms. By the way, the bank bears collateral appraisal, notarization, and cadaster registration costs and the client does not pay loan disbursement and servicing fees. While reviewing the application the bank studies the specifics and goals of the client’s business and offers the optimal solution which is about the situation with further development of the business rather than how convenient the loan repayments are (though this problem is solved too). So the bank actually spends the time to collect information, trying to understand the current and forecasted problems of business, client’s creditworthiness, etc. We focus on basic indicators which are crucial for retaining and developing the business. In case of lending these crucial factors are the term, interest rates and the right product. While refinancing the loan with Ameriabank the terms of the loan are made more favorable for the client.

Clients often hesitate about how long it takes the bank to review the application…

I assure you that all procedures at Ameriabank are organized within the shortest possible time. No red tape. If the client submits all required information he or she gets the response within the defined term.
I would like also to draw your attention to the fact that it’s worth refinancing the loan not only in cases when you have difficulties with loan repayment. If the client easily makes all repayments in another bank but there is a more efficient option to use the resources, why not take the chance? This scheme is widely popular among foreign banks where borrowers use the whole potential of their loans. Moreover, SMEs are the sphere where any resource – whether time or finance – influences the development of business. Our offer provides to a businessman an opportunity to spend less money on repayment of loan and to use the free resources for further development of business.

Does your offer imply a flexible repayment schedule? Is it possible to consolidate several loans to simplify the repayment process?

We always study specifics of the client’s business in detail. I can say that the fact that companies are different (even those operating in the same industry) is one of the main distinctive features of SMEs. If required, we offer to clients a flexible repayment schedule depending on the seasonality of financial flows. Obviously, if we take a summer cafe, the main financial flows are received in summer; therefore it is better to reallocate the credit burden so that the main repayments will be made during this period. In many cases the initiator of flexible repayment schedule is the bank itself and not the borrower, since many businessmen of SME sector do not even know about such possibility. As to consolidation of loans, Ameriabank is open for it, but before making a decision you would better first study the terms of lending and the purposes of loans to understand whether it is reasonable to consolidate loans or not.

Other banks offer loan refinancing too. What is the main benefit of Ameriabank’s loan refinancing campaign?

Frist of all, our offer is highly competitive in terms of loan term, repayment schedule and interest rates. Besides, I would recommend that clients carefully study the terms of lending both before applying for a new loan or refinancing and instead of going for advertised interest rates, inquire about loan service fee, for instance, which may considerably increase the actual interest rate. As I already said the bank bears almost all costs of transferring the loan to our bank and in our case the declared interest rate would be hardly different from the actual one.

And perhaps the main advantage of our bank, irrespective of the campaigns and special offers, is client-centered approach and package solution of clients’ needs.
Whether the client applies for loan refinancing or a new loan, we always prepare a more favorable solution which may include a package of banking products used in different phases of business. We actually create a “loan basket” which may include products like loans, credit lines, LCs, factoring, bank guarantees, purchase order finance, etc. Of course we have standard terms and conditions for providing financial resources but within those standards we each time develop a specific loan or service package thus actually creating a new product and a new solution for each borrower. Grounds for mutually beneficial cooperation between the bank and the client are laid when the client sees that we value creation of favorable conditions for the growth of their business more than getting big and quick revenues.

Thank you, Mr. Gevorgyan. I think that businessmen will appreciate Ameriabank’s offer.

Tomorrow’s topic is no less interesting. We will talk about how to save money, time and nerves and will tell you about refinancing of consumer loans. 

Updated 09.06.2016, 14:56
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