Fixed Assets Financing

The Palestinian Banking Corporation extends medium to long-term credit to finance the acquisition and replacement of fixed assets (land, office and plant buildings, machinery and equipment, tools and fixtures, furniture and office equipment, vehicles and trucks, etc.) that forms the basic production factor for investment projects. The extended credit is provided under the following terms:

• Loan Size: From $ 25,000 - $ 1,000,0000.
• Loan Period: From 1 to 7 years with a maximum grace period of 2 years. In some cases and for special projects, credit may be extended for more years.
• Repayment Method: Depends on the project cash flows. It may be collected monthly, quarterly, semi-annually, annually or seasonal, particularly in the case of agricultural projects.
• Interest Rate: Interest rate depends on the nature of the project itself, operating and financing risk associated with the project and financing program. PBC offers a wide range of lending and financing programs with competitive fixed annual interest rate ranging from 7 - 8% or floating interest rates (LIBOR+) for loans above $ 500,000 and may be granted to projects with effective development impact. This in addition to an annul service fees of 1% that may be taken for one time for certain projects and large loan amounts.
• Collateral and Guarantees: The client has to provide adequate collateral and guarantee. Mainly one or more of the following types of collateral and guarantees can be accepted:
  1. Registered land (Taboo).
  2. Bank guarantee.
  3. Cars and vehicles with comprehensive insurance.
  4. Corporate stocks traded in Securities Exchange Markets.
  5. Apartments registered in the Taboo.
  6. Respected personal guarantors, termination benefits and provident funds of employees working in recognizable NGOs.
  7. Any other accepted legal collateral.
  
  The accepted collateral varies from one project to another depending on the client credit history, project type, project financial soundness and economic viability. The above guarantees and collateral are adhered to in practice, with the exception when a good client warrants special attention. The General Manager and Projects Committee, therefore, has accepted a recommendation from the Corporate Banking Manger to pay special attention to borrowers proved to have successful business and who have maintained a high rate of repayment. The exception given to such clients is that, in addition to the basic security requirements (i.e. agreement, guarantors and promissory notes), land registered in “Malia” might be accepted instead of “Taboo” in certain cases.