In what form can a bank disburse the amount of assistance it has extended to a company?

In what form can a bank disburse the amount of assistance it has extended to a company?


A bank can disburse the amount of assistance in any of the following forms:

1) Non-fund based lending
a. Bank Guarantee
b. Letter of Credit

2) Fund based lending
a. Loan
b. Overdraft
c. Cash Credit
d. Bills purchased/Discounted
e. Working Capital term loans
f. Packing Credit
What is non-fund based lending?
Non fund based lending, where the lending bank does not commit any physical outflow of funds…..
What are bank guarantees? How do they work?
Bank Guarantee is a non fund based lending given by the bank to ensure that the liabilities of a debtor will be met….
What is letter of credit? What are the different parties involved in a LC?
Letter of Credit is a non fund based lending which is very regularly found in international trade….
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