Question

Give the main forms in which financial assistance from a bank may be available.

Enumerate the main forms in which financial assistance from a commercial bank may be available.

Answer 1

1. Loans: Banks provide term loans (short-term, medium-term, or long-term) for specific purposes like buying machinery or working capital needs.
2. Overdraft Facility: A business can withdraw more money than it has in its account, up to a certain limit, for short-term financial needs.
3. Cash Credit: Similar to overdraft, this facility allows the business to withdraw funds within a credit limit, typically against security like stock or receivables.
4. Bills Discounting: Banks also provide finance by discounting bills of exchange, offering funds to businesses before the payment is due from customers.