BANKING AFFAIRS

Detailed explanation-1: -Funds provided by the bank to an entity for a specific purpose, to be repayable after a short duration is known as Advances.

Detailed explanation-2: -A credit facility is an agreement between a lender and a borrower that allows for greater flexibility than traditional loans. Types of credit facilities include revolving loan facilities, retail credit facilities (like credit cards), committed facilities, letters of credit, and most retail credit accounts.

Detailed explanation-3: -A short term loan is a type of loan that is obtained to support a temporary personal or business capital need. As it is a type of credit, it involves repaying the principle amount with interest by a given due date, which is usually within a year from getting the loan.

Detailed explanation-4: -Short-term loans come with a repayment tenure between 1 to 5 years. In case of long-term loans, the loan tenure may vary between 10 to 20 years. The longer repayment tenure, therefore, allows a business to distribute the repayment over a longer period.

Detailed explanation-5: -Revolving credit facilities are almost always used for the short-term. Generally speaking, they last from anywhere between six months to two years. As long as you keep up with the repayments and everything is okay in the eyes of the lender, you may be able to extend it.