What is Corporate Loan??
Corporate lending is essentially the same thing as a personal loan, except instead of being made from a bank to an individual, it is made from a bank to a company. As a result, the amounts of money being dealt with tend to be substantially larger, and some of the protections are a bit different. There are a number of different forms of corporate lending, including asset-based lending, structured finance, and cash flow lending.
Asset-based lending is when the loan given is secured by means of some sort of asset. In personal loans, mortgages are probably the most well-known form of asset-based lending, but companies are more likely to use real-estate, intellectual property, or expensive equipment. Asset-based lending is one of the more secure forms of lending, since the bank lending the money has protected itself by balancing the value of the assets with the amount of the loan.
Types of Corporate Loans
The other Type ofsCorporate Loans are:-
» Term Loan.
» Working Capital Loan.
» Overdraft Against Property
» Overdraft Against FDR
» Overdraft Against NSC
» Gold LOan
» Commericial & Institutional Loan
Benefits of Corporate Loan Another benefit of getting a business loan is that, if the loan is lent to a corporate entity, the loan will not usually have to be repaid by the business owner if the company fails. In the event of failure, the business is liquidated, which helps pay back part (sometimes all) of the funds borrowed. Many business owners keep this advantageous aspect in mind when borrowing money because it is only the corporation that will go bankrupt in the event of loan default, not the owner personally.