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SHORT AND MEDIUM TERM FINANCE - Coggle Diagram
SHORT AND MEDIUM TERM FINANCE
Banks Criteria for Lending
P
urpose of borrowing
R
epayment terms
A
bility
financial performance
I
nsurance
C
haracteristics
past records
interviews
ratios
Margin of profit
A
mount of borrowing
Security for lending
easy to take
easy to value
easy to realise
Personal guarantees
Budgeting for Borrowings
Overdraft
Term loan
Committed facility
Revolving facility
Uncommitted facility
Banker's acceptance
Banker/ Customer relationship
Receivable/ Payable
Bailor/ bailee
Principal/ agent
Mortgagor/ mortgagee
Fiduciary
The bank's rights
Charges & commissions
Use of customer's money
Overdrawn balances
Customers drawing checques
Lien over securities
Indemnification
The bank's duties
honour customer's cheques
receipt of customer's funds
Repayment on demand
Comply with customer;s instructions
provide a statement
confidentiality
advice of forgery
care and skill
closure of accounts
Customer's duties
duty of care
advice of forgery
Maintaining good relationship with the bank
maintaining the value of any security (pledged)
Informing the bank (progress of business)
use overdraftappropriately
Overdrafts
Considerations
Amount
Margin
Purpose
Repayment
Security
Benefits
Medium & Long-term Loans
Term of loans
length of loan
internal guidelines
Govt regulations
negotiations
Loan repayment
Bullet
Ballon
Amortising
Loan interests
Fixed
Variable
Interest rate determination
level of risk
level of interest rate in the economy
status of the borrower
security offered by the borrower
amount of the loan
purpose of the loan
duration of the loan
Loan covenants
positive
negative
quantitative
Leasing
Hire Purchase