Small and Medium Enterprises (SMEs) and Corporations are crucial components of a country’s economy. To support their financial needs, banks offer specialized banking services known as SME & Corporate Banking. We will explore the definition and overview of SME and corporate Banking, the types of banking services offered, and the requirements and procedures of corporate finance.
Definition and Overview of SME & Corporate Banking refers to the range of banking services that cater to the financial needs of small and medium-sized enterprises (SMEs) and corporations. SMEs are businesses that employ fewer than 250 people, with an annual turnover of less than $50 million. Corporations, on the other hand, are large businesses with a turnover of more than $50 million and employ more than 250 people. Banks offer a range of banking services to SMEs and Corporations, such as account opening, credit facilities, and SME finance. These services are specialized and differ from those offered in retail banking. For example, in SME & Corporate Banking, banks offer customized credit facilities and advisory services tailored to the specific needs of the SME or Corporation.
Account opening is the first step in SME & Corporate Banking. Banks offer specialized accounts for SMEs and Corporations, such as current accounts, savings accounts, and foreign currency accounts. These accounts come with tailored services, such as online banking, mobile banking, and cash management services.
Credit facilities are also essential banking services offered to SMEs and Corporations. These facilities include working capital finance, overdrafts, term loans, and revolving credit facilities. These credit facilities are customized to meet the specific needs of SMEs and Corporations. For example, working capital finance is designed to provide short-term finance for day-to-day operations, while term loans are long-term loans used for capital expenditures.
SME finance is another critical banking service offered to SMEs. This service provides funding for startups and small businesses. SME finance includes equity finance, debt finance, and venture capital. These financing options help SMEs to grow and expand their businesses.
Corporate Finance (Requirements and Procedures):
Corporate finance refers to the financing and investment decisions made by corporations. Banks offer specialized corporate finance services, such as trade finance facilities, mortgage finance, and trade working capital (TWC).
Trade finance facilities LG / LC / SBLC / TR/ structure products:
Trade finance facilities are specialized banking services that provide financing for international trade transactions. These facilities include letters of credit (LC), standby letters of credit (SBLC), trust receipts (TR), and structured products. These facilities help SMEs and Corporations to manage their risks in international trade transactions.
Mortgage finance is another specialized banking service offered to Corporations. This service provides financing for the purchase of commercial and industrial properties. Mortgage finance is long-term.
Trade Working Capital (TWC):
Trade working capital (TWC) is a specialized banking service that provides financing for the purchase of raw materials and the production of goods. TWC is an essential financing option for SMEs and Corporations that need to manage their cash flow and working capital.