Bank Facilities

SPK will help the business grow by getting credit facilities from banks and other financial institutions, which is required to conduct the business activities of a trading company. Trade Finance will support those businesses which do not have enough Cash Flow or Working Capital to meet the business needs. Bank facilities will also give relief from a cash crunch, extended credit period of customers, and blocked funds on unsold inventories, to a certain extent.

SPK will help a business to offer a more competitive price and terms to the Suppliers and Customers by ensuring guaranteed payment to the suppliers in time, based on certain pre-agreed conditions. It will also support the business from cash constraints or liquidity gaps by providing the options of Terms loan, Overdraft, Customer Invoice, discounting. etc. Bank facilities will allow businesses to procure inventory in bulk quantity, thereby providing the business benefits of negotiation and high-quantity discounts which would result in an increase in profitability. Trade Finance also helps the business to build a strong Supplier/Customer relationship as the payment risk is minimized to the maximum extent.

Types of Bank Facilities:

  • Working Capital: Working Capital is the difference between Current Assets (Cash + Inventory + Accounts Receivable) Current Liabilities (Accounts Payable + Short Term Borrowing + Accrued Liabilities). It is essential to study the operational cycle from procurement of raw material/inventory till payment to the suppliers, i.e., from the point at which the company procures raw material till the payment is received on sale of goods and payment is made to the suppliers. The number of days taken in this conversion cycle is very relevant for the analysis of working capital. Based on this analysis, the finance team can identify the working capital gap and plan to source the fund to fill the gap.
  • Term Loans: A term loan is an advance received from the bank which has to be repaid in a specific number of installments. Term loans charge a rate of interest, either fixed or fluctuating, which has to be paid along with the fixed installment. Businesses generally avail Term loans for the purchase of fixed assets. Term loans can be categorized based on the tenure of the loan as Short-Term Loan, Intermediate-Term Loan, and Long-Term Loan. A Term loan can also require collateral to reduce the risk of default of payment.
  • Letter of Credit: Documentary Credit, or commonly called Letter of Credit (LC), is an irrevocable undertaking issued by a bank whereby the bank undertakes to make payment to a beneficiary provided documents as per the LC are presented, and all terms and conditions are complied with in an International Trade, the Exporter and the Importer use an intermediary such as a bank to guarantee the payments and delivery of goods. Due to factors like distance, uncertainty on the genuineness of a party, etc. in case the buyer is unable to make the payment, the bank will be required to cover the full amount.
  • Bill Discounting or Invoice Discounting: Invoice discounting allows a business to immediately receive a part of the raised invoice amount on presenting the invoice and the balance is received after the payment is received from the customer. Invoice Discounting helps obtain funds immediately, which will increase the Cash Flow of the business. In a normal scenario, this facility is customer-specific and as per the Bank policy with the customer. The bank will look at the payment capacity of the customers, the trustworthiness of the borrower, and further security before discounting an invoice.
  • Cheque discounting: Cheque discounting is a facility provided by the bank wherein the bank finances the transaction and provides funds before the due date of a PDC issued by a customer. Through this arrangement, the supplier gets the payment immediately allowing the customer to enjoy a credit period to make payment.
  • Bonds or Guarantees: Bonds or Guarantees are facilities extended by a bank that provides the buyer security in case of failure by the seller to settle the obligation. The buyer receives compensation from the bank when the seller fails to deliver the ordered goods. These are mainly used in the Construction industry or for specific projects. The different types of bonds or Guarantees based on 'on-demand' and 'conditional’ classes include Tender Bond, Performance Bond, Advance Payment Bond, Retention Bond, and Payment guarantee.

Why choose SPK auditors for Bank Facilities services?

There are several reasons why businesses in the UAE may choose SPK Auditors for bank facilities services:

  • Expertise: We have a team of experienced professionals who are knowledgeable about the banking and finance industry in the UAE and have a deep understanding of the financial products and services offered by local banks. This expertise can help businesses navigate the process of securing bank facilities and ensure that they receive the best possible terms and conditions.
  • Objectivity: As an independent and objective third-party, SPK Auditors can provide impartial advice to businesses on the most suitable bank facilities for their needs. We can also negotiate on behalf of the business to ensure that the best terms and conditions are obtained.
  • Relationships: We have established relationships with local banks in the UAE, which can help expedite the process of securing bank facilities and ensure that the business's needs are met in a timely manner.
  • Comprehensive Services: We can provide a range of services related to bank facilities, including assistance with loan applications, negotiating loan terms, and managing loan disbursements and repayments. We can also provide financial and strategic advice to businesses on how best to use the bank facilities to achieve financial goals.
  • Strong Reputation: We have a strong reputation in the UAE for providing high-quality financial and advisory services to businesses. This reputation can help businesses build trust and confidence in their decision to choose SPK Auditors for their bank facilities needs.

By working with SPK Auditors for bank facilities services can help ensure that you receive the best possible financial solutions for you needs.

Connect With Us

Contact us today - to discuss how we can help your business grow.

We have the resources, the experts, the knowledge and experience to help your business grow. Once you’ve contacted our team, we’ll follow up as soon as we can.

    Get a quick answer

    To know more on SPK Auditors services, please fill out the contact form below and we will make sure your inquiry is routed to the appropriate member of our staff.