Credit [credit] (loan) — the amount of money that is transferred by one party to the contract, the other party on a fee basis (as the price is the percentage), http://www.cashadvance-loans.net/ohio/cash-advance-toledo-oh/ maturity (differ in short -, medium-and long-term loans) and unconditional repayment. Any economic object can act as a creditor and borrower in the process of functioning of the economic system. But the leading place here is occupied by banks: lending is a traditional type of services produced by them, the main source of funds for their existence.
. What are the principles of lending?
The principles are the basic rules of any kind of activity, recognized as such due to the fact that they Express certain causal relationships and persistently repeated in most cases When lending on turnover credit follows the movement, turnover of the object of credit. The credit advances expenses of the borrower till the moment of releasing its resources. The amount of the loan increases as the objective need for the loan increases and is repaid as the need decreases. This method provides a continuous, as the need decreases or increases, synchronous movement of the loan is a continuously renewable process.
When lending on the balance, the loan is interrelated with the balance of inventory and costs that caused the need for a loan. For example, an enterprise can already purchase the necessary values from its financial sources and only then apply to the Bank for a loan under their security, thereby compensating for the costs incurred. The credit in this case is given under the balance of inventory in the order of compensation, but not advance payment of costs (already made in this case) for acquisition of necessary materials. Most often, lending on the balance, as a rule, already covers a smaller range of lending objects, mediates one of the objects, while lending on turnover is associated with the movement of not a separate, private, but a total lending object.AEV.