Short-term loan is provided by the bankfor a short period of time, the amount of money given on terms of urgency, pay and return. As a rule, contracts with borrowers stipulate the period for which the loan is to be repaid, and the interest rate, and the conditions for lending to individuals differ from the principles of the work of banking institutions with the population. Currently, short-term bank loans aimed at financing enterprises are divided into single loans, overdrafts and loans in the form of a non-revolving or renewable credit line.
Pledge: Private companies can get short-termcommercial loan, providing the banking institution with a pledge of liquid assets, the sale of which in the event of non-payment of money taken from the creditor can cover the amount owed to the bank. As a pledge, firms can use residential or commercial real estate, vehicles and land, specialized equipment and equipment, money contributed to the deposit, goods in circulation.
Overdraft: The overdraft offered by bank offices -this is a short-term loan issued to enterprises to cover the temporary shortage of working capital used by the company in national currency so that the company can perform current settlements. Currently, the overdraft is provided by paying payment documents over the balance of funds on the current account of the company, within the originally agreed amount. And the overdraft is repaid at the expense of all money resources arriving on the current account of the enterprise-client.
To receive an overdraft can expectCommercial companies with an unblemished credit history. The meaning of this type of short-term loan is that the banking institution replenishes the amount insufficient for the payment of the client's account in the situation, if there is less money on the current accounts of the organization than is necessary for payment. Moreover, the financial institution's funds are transferred directly to the beneficiary's current account, the name of which is indicated in the payment documentation, and not to the account of the enterprise that is the client of this bank.
Overdraft is usually repaid in automaticthe order at the time the funds are credited to the client account, and the terms of such a type of lending are clearly prescribed in contracts signed by the borrower and the lender. As a rule, the overdraft service is based on the trust relationship between the client company and the representative of the bank, so the borrower does not need to make out loan agreements every time the firm lacks funds.
Loans for replenishment of working capital: Short-term credit is granted to firms forfull-fledged financing of ongoing economic activities. Due to loans, raw materials, various materials can be purchased for the production of finished products, wholesale purchases of all kinds of goods, the purpose of which is their subsequent resale.
Credit line: Quite often a short-term loan for commercialorganizations are issued through the opening of a credit line. In this case, money is given to the client in the form of separate tranches over a specific period of time, within the limits originally stipulated in the contract, and no special additional negotiations are required.
Non-renewable credit line isa type of lending, when within a limit set by a banking institution, a commercial organization receives tranches for a specific amount, pre-registered in the contract. In the case of opening a renewable line, the customer's enterprise receives cash tranches, and after they have fully repaid, they can receive new cash loans within the established limit and on the conditions set forth in the loan agreement.