Getting a bank loan with a group

[Alexandoy]

When I was new to my first job I have heard of the syndicated bank loan. It is a loan that is taken by a group of people but the signatory of the loan application is just 1 person. For protection and clarity there is a side document that stipulates the nature of the loan and the borrowers. Usually the syndicated loan is applied by business partners for their business.

During my time of working in the bank the syndicated loan was not heard of anymore. But a friend in the loans department said that the bank still allows it. By the way I was a technical support for the computer system of the Loans Department of the bank so I was privy to such information. For those partnerships that are applying for a bank loan I guess the easiest path for approval is the syndicated loan.

 

[Sammyesx]

Am not familiar with these kind of loan system, but in a situation where by the loan period expires and the loan has not be replayed who will be held accountable? Collateral, as we know is needed to get a loan, Since it is a collective loan who will be the one to provide the collateral that will be used to secure the loan?

 

[Augusta]

I don’t even like group loan because of how people are so bad when it comes to handling money, but sometimes it is necessary especially when you want a huge one that an individual can’t be allow to receive. But if one can find trust-worthy people then it will be fine

 

[funmi]

Well, that type of loan is not common here in Nigeria but I do have a question. What if one or two people in the group could not fulfill their own terms and conditions or they couldn't pay back, what will happen to the group leader or the person that the signature was used for the whole group?

 

[Ahmedo24]

This syndicate loan may be available only in your country and it is possible to be existing in other countries but with a different name tag , it is a good loan but my concern is that since it come with a single signature standing.in for many people , could their be forms that others will fill to show that they are part of the beneficiaries or the single person will responsible for every ones actions and inactions upon repayment of the syndicate loan?

 

[Mika]

In our home country, there is a provision to get a loan if you form a group and the members of the group sign a no objection agreement. This is usually a small loan for small businesses. These loans are given without any collateral mostly by microfinance. sadly, these loans have high interest compared to big banks.

 

[Ahmedo24]

In our home country, there is a provision to get a loan if you form a group and the members of the group sign a no objection agreement. This is usually a small loan for small businesses. These loans are given without any collateral mostly by microfinance. sadly, these loans have high interest compared to big banks.

Any loan given to people for small businesses should come with single digit interest so that people can easily invest in the learning to business break Even and eventually pay back the loan as when due. It is also advisable that when people want to take loan it should be a government facilitated loans not from individual Banks because the the banks usually charge very high interest rates I wish you came back in very short time.