Title:
A Guide To Fast Cash Loans
Word Count:
333
Summary:
Finance is what allows business to exist. Adequate finance is required to meet the various commitments
arising out of business transactions. The financial requirements of business can be broadly classified into
two categories- short-term sources and long-term sources.
Keywords:
fast cash, bad credit fast cash, fast cash advance, fast cash leasing
Article Body:
Finance is what allows business to exist. Adequate finance is required to meet the various commitments
arising out of business transactions. The financial requirements of business can be broadly classified into
two categories- short-term sources and long-term sources.
Short- term finance is required to meet the working capital requirements of a business firm. These are the
funds required for a period up to 1 year. The sources of short-term finance are: trade credit, bank
borrowings, factoring of receivables, commercial paper and accrued expenses and deferred income. Trade
credit refers to the type of credit provided to customers by suppliers of goods in the normal cause of
business transactions. The trade credit is easily available and is dependent on personal relationship between
the supplier and the buyer. It also offers better access to small and newly established business concerns by
selling the goods on credit basis.
Banks constitute an important institutional source of financing the working capital requirements. Banks
consider various aspects such as production and marketing plans of the customer while determining the
credit requirements. The amount so determined by the bank is known as credit limit. Bankers are required
to fix separate credit limits for various types of credit facilities to be extended to various types of borrowers.
Margins are kept by the banker before granting finance. This is based on the principle of conservatism and is
decided to ensure safety of funds.
Banks extend the following type of financial facilities to customers: Over draft, Cash credit, Purchase or
discounting of bills and demand loans. Over draft is a temporary arrangement whereby the customer is
allowed to draw over and above the balance standing to the credit of the customer. Under cash credit
facility, a borrower is permitted to withdraw funds from the bank up to the sanctioned credit limit. Demand
loans are called the ad hoc or temporary financial accommodation granted to customers to meet unforeseen
contingencies. The borrower has to pay a higher rate of interest on these types of advances.
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