Corporate finance
FAQ
I would like to be made a financing offer. How can I get one?
What is the difference between directly enforceable guarantee and demand guarantee?
What is an indirect guarantee?
When does my company need bank guarantees?
How can I prepare of negotiating financing?
How can I divide equally my vehicle, machinery or equipment investment expenses on a monthly basis?
How could I boost my company’s sales by offering OP financing to my customers?
What are the borrowing rate options available and how can I protect against a rise in interest rates?
What financing options can the bank offer when my business is subject to seasonal fluctuations?
What does guarantee advised through another bank mean?
What do equal payment, equal amortisation and variable annuity mean?
What options can the bank offer in addition to a standard loan if I am to acquire cars?
What collateral securities can I use when applying for a loan for my company?
Can I change the loan term and repayment amount?
I would like to be made a financing offer. How can I get one?
You can apply for company financing easily online. An online application does not commit you to accepting any financing granted, and is the fastest way to apply. You can attach the required appendices and information to your application.
Apply for financing for your company
Compare the most common financing solutions
You can also contact your OP cooperative bank or nearest branch to book an appointment for a financing negotiation. Speed up the process by making a financing application in advance.
What is the difference between directly enforceable guarantee and demand guarantee?
In directly enforceable guarantee, the guarantor is liable to pay on the basis of the guarantee only if the guaranteed party is obliged to it according to the underlying contract of sale. Directly enforceable guarantees are common in Finland. In demand guarantee, the guarantor is subject to payment obligation when the beneficiary has presented a demand for payment based on the guarantee terms and conditions. Demand guarantee is a commitment independent of the underlying contract of sale. Demand guarantees are common in business abroad.
What is an indirect guarantee?
OP asks its correspondent bank in the beneficiary’s country to issue the beneficiary an actual guarantee against OP’s counter-guarantee. When an indirect guarantee is issued, costs are charged by two banks, that is, OP and the correspondent bank.
When does my company need bank guarantees?
If your customer expects a guarantee to fulfil a contractual obligation, an OP cooperative bank can give a bank guarantee on your company’s behalf.
A bank guarantee may be given in security of performance, payment of a transaction price, guarantee period or fulfilment of another contractual obligation. A bank guarantee is a commitment issued by the bank on your company’s behalf in favour of your domestic or foreign contractual partner (beneficiary), under which the bank as guarantor is committed to monetary liability on behalf of your company.
Bank guarantees require a financing decision from your bank.
How can I prepare of negotiating financing?
You should collect extensive information on your project in need of financing so that the bank can start handling your case quickly from the very beginning.
For the negotiation, the bank needs evidence of the purpose for which you apply for financing. If your company is just beginning its operations, it must show a business and budget plan, on the basis of which the bank will assess whether your company has business potential and is eligible for financing.
The bank expects a company to provide the most recent financial statements information that should also show prior financial years. If more than six months have passed since the last financial statements, the bank may also require accounting run or an interim financial statements.
In addition, the company should draw up an action plan for the project in need of financing, which reveals the effects of the financing on the company’s future and profitability. The bank also needs detailed information on collateral you can offer.
Your bank will advice you when your make an appointment and during the negotiation if it needs more information on the project in need of financing.
How to prepare for a financing negotiation
How can I divide equally my vehicle, machinery or equipment investment expenses on a monthly basis?
Through our lease and hire-purchase solutions, you can divide such expenses for up to five years. The expenses are divided equally, in which case you can more easily predict, manage and compare the expenses against income generated by the investment.
How could I boost my company’s sales by offering OP financing to my customers?
Sales finance is likely to facilitate and quicken a customer’s buying decision, boost sales and the profitability of an individual transaction. It also reduces your risk and speeds up your cash flow.
As a vendor, you can offer your customers financing for purchasing vehicles as well as machinery and equipment. After entering into a vendor cooperation agreement, the vendor can conveniently make financing applications on the vendor’s modern online service whenever it suits you best.
What are the borrowing rate options available and how can I protect against a rise in interest rates?
The Euribor rate is mostly used as your loan’s reference interest rate. You can also choose a fixed rate for your loan for a period of your choice.
A recommended way of protecting against higher interest rates is to include an interest-rate cap or corridor to your loan.
What financing options can the bank offer when my business is subject to seasonal fluctuations?
For your company’s working capital needs, we can offer you a corporate account with a credit facility or OP Credit Facility.
You can sell your company’s accounts receivable to the bank. Factoring is ideal for companies engaged in manufacture and wholesale that require working capital financing.
Read more about Corporate account with credit facility
What does guarantee advised through another bank mean?
OP’s direct guarantee is sent to the beneficiary’s bank (advising bank) by using the SWIFT system. The advising bank forwards OP’s guarantee to the beneficiary without any other liability on its part and confirms to the beneficiary that the guarantee is binding on OP. The advising bank charges a fee for forwarding the guarantee.
What do equal payment, equal amortisation and variable annuity mean?
Equal payment means that the borrower repays an equal amount throughout the loan term that includes amortisation and interest. The loan term will become longer when interest rates rise and vice versa.
Equal amortisation means that the amortisation amount is steady. In addition to amortisation, the interest amount payable varies. The repayment amount is larger at the beginning of the loan term and the loan term remains unchanged.
Variable annuity means that the loan repayment changes only if interest rates change. A higher interest rate means a higher repayment and vice versa. The loan term remains unchanged.
What options can the bank offer in addition to a standard loan if I am to acquire cars?
We offer finance and maintenance lease as well as hire purchase for car financing.
When you use our car financing options, the vehicles you buy will serve as collateral for financing. At the same time, your company’s collateral securities are not tied up to vehicles but are available for other potential purchases without burdening your company’s balance sheet.
This is how your company can prepare, for example, for unexpected expenses by keeping its collateral available for other use. Considering that a loan agreement requires collateral securities of the company, it ties up the company’s assets to financing.
What collateral securities can I use when applying for a loan for my company?
The bank needs collateral for a loan it has extended in security for repayment.
The most typical corporate insurance policies are as follows:
- Business property
- Shares in business premises
- Business mortgages (floating charges) that includes
- Machinery and equipment
- Investment assets
- Inventories
- Receivables
- Vehicles and working machines
- Various guarantees
- Residential buildings
- Other property holdings
An entrepreneur may also use his/her own collateral in security for the company’s financing, such as:
- Owner-occupied home
- Holiday home
- Investment assets and land areas
- Wood lots
Collateral provided does not serve as full collateral when applying for financing. For each collateral, the bank has defined a collateral valuation percentage on which you will get more information during financing negotiations. At the same time, the bank will determine the amount of collateral needed for the financing you are applying for.