For financing corporate companies, banks use own and varied forms of loan memorandums which gather commercial and financial knowledge about the client. Credits granted to companies, whether public or private, generally comprises loans for working capital and for fixed assets, financing such as overdrafts, term loans, syndicated loans, and revolving credit and working capital loans. Banks do analyze a set of basic and additional criteria such as the ability of continuing business, the expected future cash flows, security and collateral, the rate of return to the bank as well as the level of the whole business which the bank has done with them. Credit papers needed for the conclusion of the convention between the bank and a potential client are governed by Law No 58 – the Banking law and procedures issued by NBR. The composition and quality of a bank’s loans should be reflected in its loan policy.

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