Industrial Loan is for Business Corporation, commercial enterprise, factory or industry. This will assist in creation, expansion and modernization at the industrial and private sector encouraging the inflow and participation of capital from different sector.
Last Updated Date: May 16, 2022
Prime Commercial Bank was founded in September 2007 as the 21st commercial bank in Nepal. It has been classified as an 'A' class financial institution under Nepal's Banks and Financial Institutions Act. The primary motto of this Bank is 'Banking Service to All,' with the 389 total promoters holding 70 percent of the bank's stock. The bank has developed itself at the highest level of financial competitiveness, focusing on offering outstanding service to its customers. The bank has emerged as an emerging player in the financial sector, maintaining excellent relationships with respected clients through an emphasis on excellence in customer service.
Industrial loan is any loan made to a business or corporation, as opposed to an individual. Commercial and industrial loans provide either working capital or finance capital expenditures such as machinery or a piece of equipment. This type of loan is usually short-term in nature and is almost always backed by some collateral. These industry loans have become more popular over the last 20 years, as they provide a means for smaller businesses to generate working capital or finance expenditures. The purpose of the Industrial Guaranteed Loan Program is to improve, develop, or finance business, industry, and employment and improve the economic and environmental climate in rural communities. This purpose is achieved by bolstering the existing private credit structure through the guarantee of quality loans which will provide lasting community benefits. The beneficiaries are Individuals, sole proprietorship companies, limited partnership, limited liability companies, which are registered and licensed to practice its business.
Commercial loans usually charge flexible rates of interest that are tied to the bank prime rate or another benchmark rate such as LIBOR. Many borrowers must also file regular financial statements, at least annually or more frequently in the case of borrowers that carry higher risk. Lenders usually require proper maintenance of the loan collateral property and hold borrowers to certain covenants such as a debt service coverage ratio (DSCR).Small and medium-sized businesses make up the bulk of borrowers for C&I loans because they generally cannot generate sufficient cash flow to continuously self-fund operations and because they lack the access to the equity and bond markets that large companies enjoy. They are distinct from consumer loans and real estate loans. Banks break out these loan categories in their financial statements.
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