Term Loans by Purpose

Working Capital loan

  • are short or medium-term loans
  • Intended to address the day-to-day operations of a business.
  • It is a loan funding immediate needs, allowing the temporary build-up of inventory in advance, financing of receivables during peak selling season, for purchase of raw materials/ merchandise when sales and cash inflow processes do not match, and paying expenses such as payroll and accounts payable.
  • Availed for financing business administration activities
  • The tenure and mode of repayment of working capital loans shall be set by considering the working capital cycle of the business.
  • Fresh-term loans may be extended to borrowers who have established banking relationship with banks as a borrower or depositor.
  • Customers applying for fresh term loans should provide up-to-date and audited financial statements if the facility is Birr five million and above, or the amount the bank may set internally.

Project Financing/Investment loan

  • are medium or long term loans
  • Availed for covering capital expenditures or non-current assets, which are assumed to cover costs of capital goods, non-recurrent renovations, research and development, and long-term business programs.
  • Acquisition of businesses or investment properties, business reorganization, and financial reconstruction.
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