Artisan credit buy-back: how does it work?

The repurchase of credit is a financing solution allowing the borrower to set up a new project, or quite simply to rebalance his budget. If such a financial transaction is relatively common for individuals, how is it structured for a professional, and more particularly for a craftsman? We will tell you all about the repurchase of artisanal credit and the documents to attach to your file!

The repurchase of credit in brief

The repurchase of credit in brief

Whether it’s an individual or a company, buying back credit is based on the same principle. Otherwise called credit consolidation or debt restructuring, credit repurchase is a financing operation during which the bank merges several loans (two minimum). There remains only one loan, at unique rates and monthly payments. The repayment of this loan is made over a longer period, which allows the professional – the craftsman, in this case – to reduce his debt ratio. He can then put his personal finances afloat or, potentially, consider a new credit which will be grafted on the redemption.

Note: what type of credit grouping can the bank offer?

A bank will offer you either a buyout of consumer credit (it only concerns consumer loans), or a buyout of mortgage (it concerns consumer credit and mortgage at the same time). The solution is therefore global, but you still have to be eligible!

Artisans: the repurchase of credit subject to strict conditions

Artisans: the repurchase of credit subject to strict conditions

As a craftsman, you no doubt know that establishing good relationships with the bank is not always easy, especially when it comes to grouping loans. In such a case, this financial solution is not necessarily viewed favorably by credit institutions. And for good reason! The latter often impose long-term financial stability. However, the craftsmen belong to a socio-professional category for which the returns of money are uncertain, like a merchant or even a liberal professional. Result of the races, the conditions of eligibility for the repurchase of artisanal credit are stricter than for a  borrower.

In addition, and this is probably what must be remembered, a debt restructuring for a craftsman will exclusively concern loans for personal use. No professional credit will be accepted by the bank. Similarly, additional cash (new loan) can only be used for personal use. In no case may it serves as a contribution to the benefit of the company.

To hope to see his debts bought back from the bank, a craftsman must be able to justify:

  • a minimum of 3 years of service in his activity at the time of the buyout request;
  • an increase or stability in turnover over the past 3 years (company balance sheets);
  • equity, that is to say everything the company owns except its debts (proof of the financial strength of a company).

An artisan credit repurchase file must also include, among other things:

  • the extract of the company (to justify registration in the commercial register and prove the legal existence of the company);
  • a photocopy of the identity card of the entrepreneur;
  • a document presenting the company;
  • amortization tables for consumer loans and outstanding home loans;
  • a photocopy of the applicant’s rental lease or title deed;
  • proof of address.

Artisan credit buy-back: how to get the best rate?

Artisan credit buy-back: how to get the best rate?

As with conventional credit, a buyout of artisanal credit can be obtained at advantageous rates, as long as the entrepreneur uses strategy. The most convincing method remains the use of simulation tools. You can find them on almost every online bank. By carrying out a simulation, the craftsman will have a better idea of ​​the cost of a potential regrouping, as well as of the new monthly payments which would be his. And above all, he can compare the offers between them by observing the rate charged by each bank.

Note: at what rate to trust?

Always at TAEG! The annual percentage rate is an essential element of comparison. It includes all the costs of buying back credit (nominal rate, cost of any insurance, etc.) and represents its total cost.Any borrower, including a craftsperson, can also request the services of a credit repurchase broker. Not only can this professional help the craftsmen to tie up their file well, but in addition, he can make them benefit from preferential rates since he is in direct contact with banks and credit organizations.

Finally, the repayment tenure is an element not to be overlooked. The more the craftsman pays off his debt restructuring over a long period, the more this solution will cost him in the end. Why? Simply because the consolidation rate will be higher.

For a tailor-made financing solution, have the reflex! For a buyout of artisanal credit or any other loan formula, an evaluation of your repayment capacity is systematically carried out. And since we only distribute one type of loan – the personal loan at a fixed rate – you have the assurance of constant monthly payments for the duration of your loan. Go to the top of the page for a simulation!

The repurchase of credit for the liberal professions

Subject to a special regime, the liberal professions must obey the rules of their corporation. Constraints that imply investments. Which are sometimes mixed with personal investments. The repurchase of credit for the liberal professions proves to be an ideal solution to facilitate the management of their budget.

The liberal professions and the risk of debt

The liberal professions and the risk of debt

Lawyers, notaries, accountants, psychologists … The income of people who practice a liberal profession can be high, but they are also random from one year to the next depending on the volume of activity. If we add the heavy loads incurred and the various credits incurred to meet the requirements of the profession or honor taxes, the liberal professions are then faced with a high debt ratio. Debt on a personal and professional level, since the place of activity is often the place of residence and that investments then have two vocations.

A risk that banks are aware of, which prefer to offer short-term loans with a high rate. A solution that presents an additional risk of increasing the debt of the liberal professions. A credit consolidation offer then appears as the solution to the problem!

The buy-back of credit adapted to the liberal professions

The buy-back of credit adapted to the liberal professions

In order to meet their needs, there is a solution for buying credits for the liberal professions. It makes it possible to cover loans committed at the professional and personal level. However, the consolidation offer goes even further, since it can also include the amount to cover:

• late payment of social security contributions and tax charges;
• bank overdrafts;
• late payment of property charges;
• professional or private debts.

As for the repurchase of credit to the private individuals, the repurchase gathers all the credits in progress under only one product, thus only one monthly payment with a negotiated APR and adapted to the incomes. This solution requires providing supporting documents: the status of the liberal profession, supporting documents for current loans, balance sheets and tax notices for the last three years and salary statements.

Credit: borrower scoring

Analysis of the debt ratio allows lenders to make an initial decision as to the admissibility of a loan request. This analysis is also followed by an in-depth evaluation which includes the study of the revenues as well as the calculation of the borrower’s scoring thanks to which the lending institution will decide whether or not it agrees to finance the project.

Income study

credit score

After analyzing the debt ratio, the bank assesses the subscriber’s income in order to anticipate their financial situation when they have to repay their monthly payments. These income criteria are essential to continue studying the file. They include several elements: firstly, the “remainder to live”, which corresponds to the share of income remaining in the household to finance its current expenses once it has paid its borrowing costs. In addition to the “remainder to live”, the “family quotient” is also evaluated. Corresponding to the annual disposable income per person, this family quotient is determined by the ratio between the net income excluding borrowing costs and the number of people in the household. Finally, the bank studies future household expenses.

Calculation of the borrower’s score

Calculation of the borrower

To decide whether to accept or refuse a file, the bank will continue its evaluation by developing a scoring. Established on a set of qualitative criteria, it will give a rating to the future borrower, indicating the quality of his file. This score will assess the level of risk taken by the bank if it agrees to lend the money necessary for the acquisition of the property. Variable from one bank to another, it is established on significant criteria such as:

  • Personal contribution: between 10 and 30% (riskier below, less profitable above)
  • The professional situation: the employment contract, length of service
  • The duration of the loan: between 15 and 20 years (less profitable below, more risky above)
  • Age of subscribers: ideally between 25 and 50 years old
  • The family situation: considered to be “stable” during the term of the loan

Not having a personal contribution or being in a precarious work

The situation does not necessarily constitute an obstacle to obtaining a loan. These are all the criteria together that will determine the overall score of the scoring. If the score is too low, the file will have a good chance of being rejected, on the other hand, a high score will make it possible to obtain more advantageous borrowing conditions.

Furthermore, depending on the scoring score obtained, the bank will be more or less demanding on the guarantees required.

Our advice: to carry out your loan search, do not hesitate to be accompanied by an Best Lenders broker. Real credit specialists, they are in the best position to defend your file with banking organizations, thus allowing you to increase your chances of obtaining a loan at the best conditions.