2. Principles of good lending
• Safety
• Purpose of advance
• Borrower character
• Nature of business
• Security
• Location of business
• Liquidity
• Safe margin
• National policy Objectives
3. Analysis of Financial Statements
• An appraisal of credit proposal
• An evaluation on borrower creditworthiness
• An analysis of financial statements
4. Term Lending
• Term loans are given for medium and long
periods, and loans are used for acquiring fixed
assets or for modernisation and expansion of
existing units.
• Term loan are repayable in yearly and half
yearly installments over a period of time.
5. Appraisal of the term loan
• Technical Feasibility
• Economic Feasibility
• Managerial Competence
• Financial Feasibility
Loans may be Secured or un secured loans.
6. Style of Lending
• Cash Credit
• Overdrafts
• Loan System
• Purchase and Discounting of bills
