This lesson explores the different types of loans and credit facilities offered by commercial banks.
5.1 Loan Categories
Commercial banks offer a range of loan products. The H.L. College of Commerce syllabus details “Types of Commercial Loans” including working capital loans, term loans, project finance, trade credit and export finance, and loans to MSMEs, corporate borrowers, and infrastructure finance . The Coursera lending module covers bilateral lending, syndicated loans, and various credit facilities . Key categories include:
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Working Capital Loans:Â Used to finance a company’s day-to-day operations (e.g., inventory, accounts receivable)Â .
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Term Loans:Â Used for capital expenditures (e.g., purchasing equipment, property)Â .
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Project Finance:Â Used to finance major capital-intensive projects (e.g., infrastructure, energy)Â .
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Trade Credit and Export Finance: Used to facilitate international trade transactions .
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Syndicated Loans: Loans provided by a group of banks to a single borrower .
5.2 Credit Facilities
Banks offer various credit facilities to meet different borrower needs. These include term loans, revolving credit facilities, overdrafts, and letters of credit . The Tennessee Bankers Association programme covers “Loan Structure and Support” and how to structure loans to meet various financing needs .