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The Role of Credits and Bank Guarantee Letters in Financing Trading Companies

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  • LuminiÈ›a Gabriela Istrate

    (The Bucharest University of Economic Studies)

Abstract

Banks provide businesses with a multitude of bank instruments which may be used to finance and develop the business of entrepreneurs. Of these, credit and guarantee instruments are the most commonly used. This paper aims to identify financing alternatives to classical loans so that businesses can carry out their work by attempting to outline the impact of credit instruments as well as of guarantee instruments used at trading company level on economic and financial indicators and on cash flow. The achievement of this approach is useful in the relationship between entrepreneurs and banks, so that the most suitable bank instruments can be used to develop the business in a changing business environment.

Suggested Citation

  • LuminiÈ›a Gabriela Istrate, 2019. "The Role of Credits and Bank Guarantee Letters in Financing Trading Companies," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 601-606, August.
    • Handle: RePEc:ovi:oviste:v:xix:y:2019:i:1:p:601-606
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    References listed on IDEAS

    as
    1. Castro, Vítor, 2013. "Macroeconomic determinants of the credit risk in the banking system: The case of the GIPSI," Economic Modelling, Elsevier, vol. 31(C), pages 672-683.
    2. Nicholas Collett & Naresh R. Pandit & Jukka Saarikko, 2014. "Success and failure in turnaround attempts. An analysis of SMEs within the Finnish Restructuring of Enterprises Act," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 26(1-2), pages 123-141, April.
    3. Matteo Alessi & Stefano Di Colli & Juan Sergio Lopez, 2014. "Loan Loss Provisioning and Relationship Banking in Italy: Practices and Empirical Evidence," Journal of Entrepreneurial and Organizational Diversity, European Research Institute on Cooperative and Social Enterprises, vol. 3(1), pages 111-129, June.
    4. Michael W. Lawless, 2013. "Entrepreneurial Risk: Jordan Baltimore and Oyster Digital Media," Entrepreneurship Theory and Practice, , vol. 37(5), pages 1229-1245, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    economic and financial indicators; bank guarantee letters; bank credit; cash flow; bank instruments;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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