Helps to ensure that customers are able to purchase stock for trading purposes or offer services.
- It's a bank undertaking hence must be secured
- Usually advanced for 12 months and on exceptional cases for 24-36 months.
- The bank earns interest income on it.
- Lasts longer, simple requirements
- Client obtains credit hence easing increase in liquidity
- Customers are able to get discounts hence increase their margins
- There must be an existing legal business with an operative Bank account
- Application for the facility with a clear purpose
- Financial information