Ebay Monster Energy Gear

Credit Loan Commercial paper

What is credit?

Credit is a contract whereby a financial institution makes available to the beneficiary of the policy, an amount up to specified limits, during a period of time. In return, the bank regularly receive interest on the amount drawn, and the commission agreed in the contract.

The beneficiary undertakes to repay the amount set forth in the agreed timeframe.

credit usually implies the opening of an account with the bank.


credit features

These are some of the types of credits that can be found in business-to-financial institution:

- Credit Credit checking : Opening a current account Credit is inherent in the policy and are carried along with the signature of the account opening and book applications.

- Credit documentary: This type of loan is used primarily in international trade transactions as a method of financing, providing high security to the seller. With this type of credit, a foreign bank is committed by order of his client (the purchaser of the goods),
to pay, negotiate or accept documents presented to it.

Documentary credits to be classified into:

a) revocable letter of credit: This is one in which after opening and prior to payment, the importer can cancel at any time and will. It is therefore of a credit transaction with a very small collection security.

b) irrevocable letter of credit : It is that once opened and can not be canceled, and therefore guarantees the exporter will collect the sale, provided that the document is correct.

c) confirmed letter of credit: When a third financial institution (usually a major international financial institution) guarantees payment to the exporter, if the customer's bank importer did not.

d) letter of credit sight: When the payment is done cash. As soon as you submit the documentation, the importer's bank proceeds to payment.

e) term letter of credit: When payment is deferred operation, ie when to expect the agreed maturity to receive the amount of the sale, once the documentation has been delivered.

- syndicated loan is a type of operation in which credit is granted several financial institutions at a time, so the financial risk of the operation, in case of default is less than if a single grant entity.

The notes are a financing mechanism that many companies rely

Who does it?

Credit transactions can be performed by any financial institution.