Types of Banking Credit
Banks offer different types of credit depending on the purpose of the financing. Below are the most common types of banking credit.
- Working Capital Loans
Working capital loans are provided to businesses to finance daily operational expenses, including purchasing raw materials, paying employee salaries, covering distribution costs, and meeting other production-related needs.
- Investment Loans
Investment loans are intended for purchasing long-term assets such as buildings, production machinery, operational vehicles, or business expansion projects. These loans generally have longer repayment periods than working capital loans.
