The Bank loan Advice and Lending
Bank Loan Advice: Lending to legal entities is based on three main aspects: the subject of the bank loan; securing a loan; and the subject of lending. You can maneuver the basics of the organization, and the technologies of credit operations, as you wish, but in any system, these 3 main elements retain their fundamental importance.
They seem to determine the effectiveness of the credit operation. Lending to legal entities implies integral elements of lending.
Success in the activities of a banking institution in lending happens only if each of the elements complements the other, and enhances the reliability and efficiency of a credit transaction. Lending to legal entities, the former system, which is based on the principles of centralized management of the economy, gave preference to the object of lending.
It was said that when there is an object of lending, this makes it possible for the company to receive a bank loan.
Lending to legal entities operates only as a system due to the combination of three fundamental elements: the subject, the object, and the bank loan collateral. There are also bank loans for individuals. Lending to individuals – includes the trust that is necessary for a credit relationship. Credit as an economic relationship is always a risk without trust is indispensable.
The subject of lending. Depending on the type of Bank loan, there may be:
- Government loan
- Commercial loan
- Civil loan
- International form of credit
From the point of view of the bank, the subject of lending is legal entities or individuals ( lending to legal entities and lending to individuals) that are capable and have material or other guarantees to carry out economic and credit transactions.
Borrower – any subject of ownership that inspires confidence in the bank, has some material value, and has the desire to pay interest on the bank loan and return it to the lender. Bank loan advice. The subject of obtaining loans can be a private person, enterprise, firm, and even the state.
A creditor can be an individual, a legal entity, as well as a subject, or a participant in a civil obligation, who has the right to demand funds from another participant in this obligation (the debtor). Several creditors may be in obligation. Each of these people may demand from the debtor some portion of the performance, or, in cases provided for in the contract or the law, the full amount.
Let us give an example if the subject of the obligation is not divided when a guarantee is issued jointly. In a narrower sense, which is mainly used by economists, and accountants, a creditor is one party in a credit relationship that provides funds (monetary resources) on the terms that they will be returned, with a term. The provision of credit funds in money is called a loan, it is repaid with monetary resources.
Lending is a form of financial support for reproduction costs, in which the costs of a given entity must be covered by a bank loan, which is provided at the beginning of payment within a precisely specified period.
Lending is a method of fast bank lending, in which the issuance of a loan and the repayment of a loan are associated with its change in the balance of credited values or costs. Loans are usually issued when conditions are created for preliminary control over the expediency of providing credit resources by the bank.
In accounting, the terms ” Credits” and “Lending” have slightly different concepts. The creditor is used to designate a citizen, a legal entity, to which this company has a debt, which is displayed in its balance sheet (accounts payable).
Lending. Principles Urgency. Loans are given for a fixed period. Recurrence. Loans must be repaid within the terms specified in the agreement. Payment of the agreed amount of interest.
Submission of the credit transaction and the norms of legislation, banking rules Credit conditions remain unchanged Mutually beneficial credit transaction. The terms of the contract must take into account the interests of both parties. All these principles must be followed.