Evaluating a large loan offer

[HostBidder]

What criteria would you use to evaluate a large loan offer (over Eur 1M)? The offer is from a major bank. I'm doing some work for a company and they are seeking the loan for a property development.

I have primarily been looking at the interest rate and the arrangement fee. What else should I take into consideration when evaluating whether or not this offer is a good deal?

Thanks!

 

[demoivre]

If it's the only offer you have it is the best deal ! Try and get approval from a few different banks and weigh up your options on the basis of what they offer you - get the banks competing for your business.

 

[ClubMan]

I don't think that the size of the loan matters in terms of assessing the value or otherwise of the offer. Obviously the rate and any fees applicable are important as are any restrictive terms & conditions on repayment or early redemption (often applicable to fixed rate loans).

 

[Squonk]

Not sure if its important...but maybe look at the form of the repayment i.e. does the bank want to get paid each month with a cheque, draft, interbank transfer etc. Where is the repayment money coming from? It may be possible to invest the repayment for say, 28 days, before you send it to the bank....you could save some money for your company.