Corporate Advances: SEPTEMBER,2013
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CORPORATE ADVANCES
SEPTEMBER,2013
NEED FOR CREDIT Business Entities require credit for - Purchasing Fixed Assets Meeting Working Capital Requirements •
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Commercial banks are traditionally, considered as provider of working capital, mainly because the resources available, in the form of deposits are of short term maturities of up to 3 years, on an average.
This is not to say that banks do not provide term loans for fixed assets.
THE 5 C’s C’s OF CRED CREDIT IT Factors determining the credit decisions are mainly : •
Character
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Capacity
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Capital
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Collateral
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Condition
CONCEPTS 1. Margin o orr L LT TV 2. Debt / Equity 3. Sec Securi urity ty viz viz.. pri prima mary ry,, col collat latera erall 4. Charge : •
Pledge
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Hypothecation
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Mortgage – Registered Mortgage, Equitable Mortgage, English Mortgage
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Assignment of Debt
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Lien
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