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.