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Banking Term Corporate Financing

Feb 3, 2015 11:52 IST

    Find important banking term that is useful in upcoming banking exam.

    Corporate Financing is the advance to business enterprises that could be in the form of term loans, the term depending upon the type of asset being financed, revolving credit through overdrafts or cash credit for working capital requirements of the business entity.

    • Term loans are primarily for capital investments in business like acquisition of immovable property, plant and machinery etc.
    • Cash credit accounts indicate continuously available finance facility to be used as per requirements up to a pre-determined limit, which will have transactions relating to both payments and receipts of an enterprise.
    • Overdrafts generally suggest short-term accommodation through a credit facility which is deemed necessary in view of sudden requirements of a business.
    • Another form of credit facility extended to corporate is against transfer of title of negotiable instruments like cheque and documentary bills of exchange.

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