Granted to be repaid within a prearranged repayment period of time with interest and Paid in a lump sum, monthly, quarterly, semi-annual or annual installments.
Short Term Loan
- Repayable within 12 months.
- The loan period is short and self-liquidating in the sense that it generates its own repayment.
- Used in financing seasonal increase in current assets
- purchase of raw materials/merchandise
- No grace period for such loans, but flexible and relaxed repayment term
Medium Term Loan
- To be repaid between 13 to 60 months (including) grace period.
- Expected in financing medium term working capital needs and acquisition and/or leasing of fixed business assets (buildings, leased land, machinery, equipment, public transport vehicles, trucks and trailers, etc.),
- To facilitate the establishment of new projects and the expansion of existing ones
- If not for working capital purposes, such loans request hall be supported by feasibility study, cash flow projections, and/or projected financial statements.
- The repayment of medium term loan is usually scheduled on a periodic repayment or installment, based on the cash flow of the business.
- Grace period based on the justification provided in the feasibility study and/or business plan.
Long Term Loan (Investment credits)
- Generally extended for capital formation through asset creation.
- Investment loans bring technological upgrading resulting in increased production, productivity, and incremental income to the borrowers.
- Intended to create income-generating assets in real sectors of the economy.
- provided over a long-term period of 5 to 15 years
- mainly aimed to finance businesses that are projects in nature, viable and profitable projects
- Purpose includes project financing, backing start up working capitals, purchase of construction equipment, or other physical assets.