Small businesses and the self-employed

Find out about the main financial products small businesses need to be familiar with.

Small businesses and the self-employed often turn to the banks for finance.

A credit facility or line of credit is a common form of borrowing used by businesses and is normally renewable annually.

The bank pays the small business’s receivables arising from its business or commercial activity in advance.

Reverse factoring or supply chain financing is a supplier-payment management service whereby the bank may offer to pay invoices before they are due.

This involves advance payment based on the purchase of receivables arising from real-estate, services or construction activities. This may or may not entail the bank or factor taking the risk of default and handling collection when due.

These are arrangements grant the use of an asset in exchange for periodic payments covering the cost of use plus interest and financial charges, which are tax deductible.

A letter of credit or documentary credit is a payment mechanism used in international transactions to give added security to both the exporter and the importer.

This is a specific form of lending tailored to property developers and to buyers of finished properties from developers when they take over a share of the loan granted to the developer by subrogation.