Bank overdraft

A bank overdraft is a source of finance which enable someone to spend more than what is actually in their bank account even if the account has no funds in it or not enough to cover the withdrawal but it will be limited.

Invoice discounting

Invoice discounting is a finance tools which use a company's unpaid accounts receivable as collateral for a loan. In invoice financing, your business retains control of its own sales ledger and chases payment in the usual way. Meanwhile, your customers still pay you directly and there is no necessary for your customers to know that a third party is involved 


Factoring is a business are selling their invoices to a third party at a discount. The provider will take the role of managing the sales ledger, credit control and chasing payment from your customers. 

Factoring facility arrangements tend to be restrictive and entering into an assignment of payment account at your customer side. It may also lead to aggressive chasing of outstanding invoices from your customers. 

Commercial papers

A commercial paper is an unsecured promissory note. Commercial paper is a money-market security issued by corporations with very high credit ratings to meet short term credit needs. Commercial papers typically trades at a discount basis, means that investors usually purchase it below the par and receive its face value as its matured. The difference between the purchase price and the face value also known as the interest of the investment. 

Trade finance

Trade finance represents monetary activities related to commerce and international trade. Individuals which involved are Importer, exporter, banks, issuer and services provider. For example, an exporter requires an importer to prepay for goods shipped. The importer naturally wants to reduce risk by asking the exporter to document that the goods have been shipped. The importer’s bank assists by providing a letter of credit to the exporter (or the exporter’s bank) providing for payment upon presentation of certain documents, such as a bill of lading. The exporter’s bank may make a loan to the exporter on the basis of the export contract.

Letter of credit

A letter of credit is a legal document that a financial institution issues to a seller of goods or services which a financial institutions promise will pay the payment to the holder. for goods/services the seller delivers to a third-party buyer. The issuer then seeks reimbursement from the buyer or from the buyer’s bank. Hence, the default payment risk of the buyer is transferred from the seller to the letter of credit’s issuer. 


Equity capital

Equity capital refers to the portion of a company’s equity , which is raised by trading as stock such as common or preferred stock to a shareholder for cash or an equivalent item of capital value. Meaning of equity is vary by their context. In general, each meaning of equity capital is refer to ownership.  


A loan is a type of long term debt in company's account. Borrower initially borrows an amount of money(loan) from the lender. Loan is obligated to pay back an equal amount of money with the interest to the lender at a regular installments basis, partial repayments or annuity with same repayment amounts. Bank is one of the main provider to corporations or individuals. A secured loan is a loan in which the borrower pledges their assets such as property as a collateral to get a lower interest rate due to reduce bank's risk. On the other hand, unsecured loans are monetary loans that are not secured against the borrower’s assets with higher interest rate due to increasing of default risk.  

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