Credit Facilities

Give a boost to your business by taking advantage of the facilities offered by ABC Bank. Whatever your business needs, our specialist Relationship Managers in all our branches will discuss and offer you a solution tailored to the needs of your business.

Term Loans – Term loans are advanced for various purposes such as; expansion of premises, buildings, purchase of stock, furniture, tools & equipment, working capital i.e. meet certain fixed expenses. Term Loans are repaid within a fixed period of time. We offer two types of term loans.

  • Short term loans: Repayment period not exceeding 3 years
  • Long term loan: Repayment period of more than 3 but below 5 years.

NB: The tenor depends on the purpose of the facility and its nature e.g. short term is mainly for financing stock/ inventory for the business, while the longer periods are for financing fixed assets.

Overdraft facilities – This is a facility basically advanced to finance working capital e.g. purchase of stock or to meet running expenses by refinancing the Borrower’s debtors.

Asset Financing – Asset Finance loans are advanced for purchase of Motor vehicles/Buses/Trucks/Construction equipment and/or manufacturing equipment.

Cheque Discounting –  This is a form of short term loan through which the client provides a post dated cheque to the bank which amounts to the short term loan taken from the bank and the interest charged by the bank. This facility can be used by individuals, SME clients as well as corporate clients.

Supply Chain Financing

Invoice discounting – This is a form of short-term borrowing often used to breach working capital deficit, your company’s working capital and cash flow position. It allows a business to draw money against its invoiced sales before the customer has actually paid. The facility is granted to SME’s that supply to pre-approved anchors.

Bank Guarantees –  This is an assurance from a bank that your liabilities as a debtor will be met. It enables you the client to acquire goods on credit thereby enabling the expansion and continuity of your business.

Bid bonds – A bid bond is a written guarantee from a bank submitted to a principal (client or customer) by a contractor (bidder) with a bid. A bid bond ensures that on acceptance of a bid by the customer the contractor will proceed with the contract and will replace the bid bond with a performance bond.  We offer both secured and unsecured bid bonds.

Performance bonds –  A performance bond is usually offered to the client (after successful acceptance of a bid bond) as security to ensure job completion. A performance Bond will usually require a bid bond, to bid for the job.  This facility is available to individuals, SME clients as well as corporates.

Letters of Credit – These are irrevocable letters of credit issued by banks on behalf of their clients’ who are purchasing goods from overseas and is issued to the vendors bank on behalf of the vendor. We offer two types of LCs;

  • Sight LC- Payment is made by issuing bank upon sighting shipping documents
  • Usance LC- Buyer negotiates for credit terms with supplier/vendor. Payment is made by issuing bank at expiry of credit period

Construction and project finance – These are funds advanced to a client for a fixed duration of time and for a specific purpose e.g. construction of a commercial or residential project for sale or lease. The repayments are on monthly, quarterly, semi- annually or annually basis depending on the cash flows.

Mortgage Facilities – As the Bank, we believe in helping you own your dream home. For this reason we have a mortgage facility designed to suit your needs

Trade Finance

Post-Import Finance –  This is a loan facility that helps you settle bills of exchange that have matured in cases where you have not mobilized adequate resources to settle the same.

Bills Discounting –  This is done when sales are on credit and secured by accepted bills of exchange where the seller may use these bills to improve their cash flow by discounting the same. ABC Bank provides funds to the customer and waits for reimbursement from the drawees (buyer) of the bill at maturity.

Avalization –  This is when sales are on credit and secured by accepted bills of exchange and the seller still runs the risk of not being paid. To reduce the risk of default, the seller may ask the buyer that the bill of exchange must bear the guarantee of the bank that on due date payment shall be made. The act of the bank adding its commitment to pay on the bill of exchange is called Avalization. It helps the buyer receive goods on credit and gives the seller the comfort of payment. It also allows the seller to discount the avalized bill to create cash flow.

Pre-shipment Finance –  This facility enables the exporter to access funds that will help in preparing the goods ready for export. It is normally supported by a confirmed export order.

Post Export Finance –  This facility enables an exporter to access funds against proceeds expected from goods that have been exported.

Documentary collections –  The seller may develop a level of trust with the buyer to the extent where goods will be shipped to the buyer even before payment has been done. Documents (including transport documents) will then be sent through the banking system.  The seller’s bank will instruct the buyer’s bank to release the documents on fulfilment of some conditions. Documentary collections help the seller to control documents and title to goods while assuring the buyer that the goods have been shipped.

Clean collections –  The presenting bank sends instructions to the collecting bank to collect proceeds and make payment on fulfilment of certain conditions. This allows for cost-effective trade finance transactions.