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ProCredit Bank to Publicise the Annual Percentage Rate (APR) Charged on Business Loans

April 22, 2014

Entrepreneurs will now also be informed about the APR, which is an indicator of the actual cost of financing 

When lending to private individuals, it has long been a legal requirement for banks to publicise the annual percentage rate of interest charged. All consumer and residential property-related lending offers and contracts by banks in the country must contain information about the APR. ProCredit Bank is now introducing the same practice in business lending.

Currently, there is no legal obligation for banks to provide business clients with information about this indicator. Entrepreneurs often do not know the real price they will have to pay for the funding they want to obtain. In addition to this, different banks charge different fees with different names, making it difficult to compare offers. Having detailed information about the APR on business loans will help the owners of very small, small and medium enterprises to make informed decisions.

Right at the beginning, when the bank makes its offer, ProCredit Bank’s experts will inform both existing and potential business clients about the APR that will be charged on the loan they are applying for. And by asking for the same information from other banks, clients will be able to compare the conditions of different institutions and will know the real price of borrowing.

ProCredit Bank also publishes APR information on its website: Visitors to the site will find examples of APR calculations for the most commonly used types of business loans. The specially designed on-line calculator makes it possible for anyone to make their own calculations by entering the desired loan amount and repayment period.

ProCredit Bank business loan contracts will also include full information on the APR, which covers all related costs. The same information will also be available through the bank’s Internet banking service: ProB@nking.

"By introducing the practice of publicising the APR on business loans, we once again show our clients that we provide full information and are open about the cost of our services. This is the key to building long-term relationships with our clients” – comments Reni Peicheva, Member of the Management Board of ProCredit Bank. “The adoption of the same approach by other financial institutions would lead to a greater level of transparency in the banking sector.”