For many, offshore loans are an obvious choice. Since they are available in numerous currencies and come in a variety of potential interest rates, it is possible to find an international loan that is more favorable to the borrower than any domestic lending alternatives.
Plus, the restrictions and prerequisites for offshore loans are often much looser than domestic counterparts, which means that those struggling to qualify in the United States could have an easier time in an offshore destination like Belize.
To help you find the right lending option from the wide variety of international loans that are available, ask yourself each of the following questions.
What is the Loan For?
Perhaps the biggest and most important question to ask when seeking offshore loans is what you need the financing for. Most lenders and financial firms in international destinations have clear distinctions between personal loans and business loans. Personal loans are typically used for things like college tuition, mortgage payments or perhaps even to pay off debts related to a medical emergency.
Commercial loans are taken out by individuals rather than individuals, and they can help pay for things like business expansion, poor sales during a particular season or a cash flow problem in order to supplement low inventory. Not all lenders offer both types of international loans, so it is important to know the difference before you start your search.
In Which Currency Would You Like the Loan to be?
When you apply for a domestic loan, it can be very difficult to get lending in any currency other than U.S. dollars. However, that may not be the currency you prefer. If you want to finance business growth into Latin America, for example, U.S. dollars may not be as desirable as local currencies.
Thankfully, one of the perks of international loans is being able to choose from a variety of currency types, just some of which include British Pounds, Swiss Francs and Euros.
What Kind of Collateral Are You Prepared to Offer?
Just like domestic loans, international loans require you to prove your ability to repay the loan. In some cases, this will require collateral of some kind.
Your collateral could be liquid assets held in an investment, real estate or something else, but make sure you have given thought to how you will guarantee repayment in order to qualify for the best interest rates. In addition, remember that you will need to submit financial statements and tax returns along with your international loan application.
What Country Do You Want the Loan to Originate From?
For a variety of reasons, borrowers of all types choose to seek international loans rather than domestic ones. However, there are many international banks around the world that provide loans, so it is smart to consider what country in particular works best for you.
If you have ties to a specific company with favorable offshore banking laws, that could be a good place to start. Otherwise, consider a destination like Belize that offers limited government intervention and low overhead and application fees.
After answering these questions, you will be ready to choose the best international loan for you or your business. To get more information, contact Caye Bank today.