Credit with poor business evaluation

Posted on

In more and more companies it happens that the BWA (business evaluation) falls into the negative. The BWA is the linchpin for lending to companies and entrepreneurs. A bank can get an overview of the current business situation from the BWA, according to § 18 of the German Banking Act. It is all the more annoying for a company if the BWA is bad. Small businesses that are run by the owner as sole proprietorships are particularly affected. It is then difficult to obtain a loan.

What exactly is the BWA?

What exactly is the BWA?

There are often unnecessary errors within the BWA. A good example of this is private withdrawal as a company salary. According to the evaluation criteria of the bank’s program, the sole proprietorship is evaluated with the standards of a GmbH. The private withdrawal, which should actually be viewed as profit extraction, is then assessed as wage costs. As a result, the company’s profit shrinks and the BWA gets worse for no reason.

These and other mistakes can prevent a loan from being received. In most cases, only two options remain open: a risk loan from private and commercial banks or you avoid the mistakes right from the start so that good BWA is created. But if you already have a bad BWA, you usually have bad cards.

Apply for a bad BWA loan

Apply for a bad BWA loan

A bad BWA loan is certainly one of the most complicated types of loans. The reason for this is simple: the borrower has no permanent position with unchanged gross or net salary per month. His financial situation is completely dependent on the current market situation and the progress of the company. Depending on the season, customers and business performance, revenues can fluctuate greatly, and financing partners and banks do not like that, of course.

That is why the BWA is interviewed beforehand. If you still want to get a loan with poor BWA, you basically have to act like someone whose monthly income consists of only a small amount. Therefore, you should calculate in advance how much money is available to you to pay off your debts each month.

Increase your own chances

Increase your own chances

Of course, a personal conversation with an employee of the bank or credit institution will also help. Especially when the business evaluation had some small weaknesses. This can then be explained in detail to the customer advisor so that he can put himself in his own position. Through this process, a better risk assessment can be obtained, which in turn helps the borrower to get cheaper interest rates. For a loan with poor BWA, the rule of thumb applies: openness and information are key.

Another way to get a bad BWA loan in full and with a short term is a targeted risk reduction strategy. Many banks shy away from the financial risk and this is where you have to “attack”. The risk can be reduced in a number of ways. The provision of an additional guarantor ensures a higher risk reduction. Additional security in the form of securities is also helpful. The securities are booked into a separate deposit and released again after the loan has been repaid in full. With a loan with poor BWA, the repayment risk should always be reduced. Security, openness and transparency are the key to success.