Business crediting, both small, and average is one of the major and most profitable aspects of activity of banks. The sense of crediting consists in that money funds of investors (get profit in the form of percent on urgent depositary contributions) are transferred in time using to borrowers who too in turn pay to bank percentage compensation for use of these money funds.
By means of business crediting there is a stimulation of economic elevating, the capital modulation in the most effective spheres of economic activities is provided, efficiency of currency circulation raises. It is the important tool of adjustment of economic processes.
Process of crediting of business is based on certain principles. Crediting principles are determining rules of behavior of bank and the borrower in the course of realization of credit relations.
Promptness is credit returning in terms which are provided by the credit agreement.
Reflexivity is complete returning by the borrower to bank cost of the basic debt.
Payable – the client pays for use of the credit to bank the additional sum in the form of percent.
Target orientation is an investment of the borrowed means in particularly specified specific goals.
Security – conformity between a debt under the credit and property value which is pledge on under the credit.
The differentiated approach is an individual approach by determination of size of a loan interest for any borrower.
The bank loan gives to the client (representatives of business) possibility:
To expand it is production-economic activities for the account and bank long-term credits (exceed term of 12 months), that is this expansion or business modernization;
To liquidate payment ruptures in current activity at the expense of working capital short term financing.
To satisfy requirements of the clients for long-term financing, banks should support in the list of the credit proposals middle and long-term credit lines from the international financial institutions and foreign banks (the European Reconstruction and Development Bank) and also they should plan investments in long-term credit operations which should satisfy demand of clients for favorable financing of renovation of basic funds (leasing transactions).
Credits to business don’t give out:
On a covering of losses of business;
On forming or authorized fund increase.
Business crediting bears in itself a certain share of riskiness. Therefore for credit reception its mortgage security with certain coefficient to a credit amount (for decrease in riskiness of a non-return) is required.
As a pledge subject can be:
Real estate and the equipment;
The property rights following from contracts;
The goods in turnover or the goods in processing;
Principal views of credits for business:
The single (urgent) credit – all credit amount the borrower receives one payment;
The overdraft for juridical persons – in case of a lack at the borrower on settlement to the account of money funds, allows performing in time necessary operations on payment;
Bank guarantee – is given on the various purposes (make a reservation within the concrete transaction), it can be guarantees on payment of obligations, tender guarantees;
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