PGP-CEM 2013-14

PGP-CEM 2013-14

BUSINESS CREDIT CARDS

ASSET BASED FINANCING

LONG TERM LOAN

SHORT TERM LOAN

LINES OF CREDIT

TY

PE

S O

F S

MA

LL

BU

SIN

ES

S C

RE

DIT

PGP-CEM 2013-14

Firms following informal business practices

Inability to maintain collateral

Lack of credit worthiness and goodwill

Lack of transparency due to poor reporting of firm data

High processing cost

GE

NE

RA

L C

HA

LL

EN

GE

S

PRO’S • Expense tracking

• Higher limits

• Cards for employees

• Builds business credit record

• Added protection

• Special perks

• Extra benefits

CON’S • Personal Credit

Issues

• High Priced Financing

• Less Purchase Protection

• Security Issues

BU

SIN

ES

S C

RE

DIT

CA

RD

S

PGP-CEM 2013-14

AS

SE

T B

AS

ED

FIN

AN

CIN

G

PRO’S

• Injection of Capital

• Increased Purchasing Power

• Low interest rates

• Faster loan approvals

• Advantage for lenders

CON’S • Commercial

lenders may not deem sales to individuals or small businesses as "eligible receivables."

• More expensive than traditional loans

• Third party gains control cash flow

PGP-CEM 2013-14

OV

ER

DR

AF

T

PRO’S •Flexible- Time

•Pay as per use

•Quick

•No prepayment charges

CON’S •Cost

•Recall

•Security

•Requires one to have a current account

•Has to be rearranged regularly

PGP-CEM 2013-14PGP-CEM 2013-14

OV

ER

DR

AF

T &

CA

SH

CR

ED

IT

PRO’S •Flexible- Time

•Pay as per use

•Quick

•No prepayment charges

CON’S •Cost

•Recall

•Security

•Requires one to have a current account

•Has to be rearranged regularly

PGP-CEM 2013-14

SH

OR

T T

ER

M L

OA

N

PRO’S •Economical

•Flexibility

•No interference in management

•May also serve long-term purposes

CON’S •Fixed Burden

•Charge on assets

•Difficulty of raising finance

•Uncertainty

•Legal formalities

PGP-CEM 2013-14

LO

NG

TE

RM

LO

AN

PRO’S •Lower Rates

• Interest Costs

•Cash Flow

•Budget

CON’S •Face

foreclosure or repossession of the property

•Prepayment charges

•Long term liability

•Exit strategy issues

PGP-CEM 2013-14

PGP-CEM 2013-14

THANK YOU

Credits:Abhijeet Verma NA 13001Abhilasha Jaju NA13009Kushal Pachisia NA13030Mayank Baid NA13031