A financing is considered long term when the debt exceeds one year. Brazil is a very promising market for financial institutions; after all, billions of reais are lent per year, including long-term financing services.
In addition, there are various financial institutions and banks in Brazil that offer various financial services, differing greatly in their rates and conditions. An example is the financing time that occurs over a period of 5 years ago, showing how conditions may vary.
Therefore it is very important to know well how long term financing works and to be able to choose yours if you need to.
What are the long term financing options and where to apply
Long term financing options vary, so it is important to know each one and know how it works.
Loans are credit release features based on the analysis of the applicant’s profile and payment terms. Some institutions that offer this type of financing are:
- BNDES (National Bank for Economic and Social Development): is a government incentive for future entrepreneurs and also for existing companies; whose available about 20 million reais in projects, currently.
- Financial: Institutions specializing in providing credit.
Guaranteed or unsecured, this long-term financing modality is a type of application that can be carried out and financed by a private company. In this way, interest will be returned to the company, which invested the amount in the loan.
For all Debentures, the income tax, which varies from 15 to 22.5%, must be paid depending on the financing time. There are three types of debenture, which are:
- Prefixed Debenture: Generates an income at the time the bond is issued. Thus, the value is fixed all month, avoiding surprises;
- Post-fixed Debenture: This is an unsecured application and its yield will be according to the Selic rate or the CDI, ie the rates vary by month.
- Hybrid Debenture: In this application there is a mix of prefixed and postfixed, always corrected by the IPCA, which indicates how inflation is at that moment.
- Debenture encouraged: This is a different application, as private companies in the infrastructure sector are responsible for selling this title. In addition, it is also the only tax-exempt debenture.
Fixed income stock rental on the stock exchange is a great financing option. This mode works when a third party share is rented, which varies between a rate of 1.0% and 5.0% per year.
The owner of the action stipulates the amount of the fee to be paid, and some shares may reach up to 10% per year, which in the long run can become a fixed income on the stock market. After the term of the contract it is mandatory to terminate the agreement as it was contracted, and in this type of agreement you need to leave some type of guarantee.
Long term business financing
A company that needs money to start a project or even for those who want to start a business can get long-term financing and also have working capital. For this, you need to provide a guarantee and if you do not meet the obligations of installment, the value will be discounted from that guarantee, which may be a mortgage or even a personal guarantee (surety).
To make a good financing and indispensable hiring a good financial advisor for businesses and ventures, which will direct you to the best loan conditions, and the main lender for companies today is the BNDES.
It is worth remembering that the project needs to be approved in order for the application to continue, so presenting a good project is essential, as this type of long-term corporate financing contributes to the country’s economy.
Long Term Real Estate Financing
Generally a long term real estate finance takes on average 20 to 30 years to be paid off. Each person has a monthly income that should be committed only in part with the loan, with a maximum of 30% of the income.
For the provision of the house or apartment, which tends to equal about 3 times more than the average salary of the Brazilian, this type of financing may be ideal. However, depending on the loan, 30 to 40% of the amount financed in cash may be required for the release of the requested credit to occur.