Page 90 - DBP5043

TYPES OF NEGOTIATED FINANCING:

1. Bank Loan/ bank credit:

The banks usually provide facilities for a brief period. Bank differentiates
their services by offering many unique advantages to attract many
customers. Among the factors considered by company in selecting banks to
make loans are as follows:

i. Willingness to take risks:
The bank will impose a different policy before offering a loan to its
customers for instance by looking at financial records and so forth. The
bank offering loose loan terms is usually being selected by the customer.

ii. Guidance and counseling:
There are banks that offer advice and counseling to help design the
company's loans. The best advice would be selected by the company.

iii. Loyalty to customers:
Each bank is different in their willingness to provide support to the
activities of the borrower when the economic situation deteriorated. If
there are banks willing to provide assistance in resolving the crisis faced
by the company, it will be selected.

iv. Specialization:
There are banks that offer real estate related loans, agriculture, farming,
animal husbandry and so on. Selection of a loan from a bank will depend
on the type of business carried out by the company.

v. The maximum loan size:
The companies typically select the bank that can provide a higher loan
size which is normally offered by large and stable banks.

vi. Other services:
The friendly customer service, efficient service and ability to transfer funds
online, will usually be emphasized before choosing the right bank.