Тема 2: MAKING CREDIT DECISIONS
Exercise 1.Прочитайте и выучите слова:
to meet the firm’s credit standards - соответствовать кредитным стандартам компании
to satisfy — удовлетворять
capacity - способность, возможность
collateral - обеспечение, дополнительное обеспечение
willingness to pay -Готовность платить
to consider borrower’s past payment patterns - рассматривать порядок осуществления платежей заемщиком
to grant a credit — финансировать кредит
to liquidate - ликвидировать, выплачивать долга
to pay debts — платить долги
to evaluate potential customers - оценивать потенциальных клиентов
creditworthiness - кредитоспособность
credit scoring - присваивание кредитного балла
Exercise 2. Read and translate the text and find out:
1 .Where can the customers receive credits?
2. What do we call the credit standards?
3. What are the 5Cs of Credit?
4. What does a good payment record show?
5. What is collateral?
6. How can the capital influence on taking a credit?
7. How can companies evaluate potential credit customers?
Making credit decisions
Customers (enterprises) can receive credit from a bank or a firm if they meet the firm’s credit standards. A firm’s credit terms and credit standards make up the firm’s credit policy. Credit standards are those requirements a customer must satisfy to receive a credit (character, payment history and so on). The financing companies usually base their credit standards on the Five Cs of Credit: character, capacity, capital, collateral, and conditions.
1. Character is the borrower’s willingness to pay. Lenders should evaluate character by considering the borrower’s past payment patterns. A good payment record in the past implies willingness to pay debts in future.
2. Capacity is the borrower’s ability to pay, as indicated by forecasts in the future cash flows. The more confidence a lender has that a borrower is going to receive cash in the future, the more willing the lender will be to grant credit now.
3. Capital shows how much wealth a borrow has to fall back on, in case the expected future cash flows with the borrower plans to pay debts don’t materialize. Lenders feel more comfortable if borrowers have something they could liquidate if necessary to pay their debts.
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4. Collateral is what the lender gets if capacity and capital fail, and the borrower defaults on a loan. Collateral is usually some form of tangible assets such as the firm’s inventory, buildings, manufacturing equipment that has been pledged as security by the borrower.
5. Conditions are the business conditions the borrower is expected to face. The more favourable business conditions appear to be for the borrower, the more willing lenders are to grant credit.
To evaluate potential credit customers in terms of Five Cs of Credit or others firms find some way to quantify how well the customer’s compare to the measurement criteria. Some companies use the method known as credit scoring. Credit scoring works by assigning points according to how well customers meet the indicators of creditworthiness.
Exercise 3. Read the text once again and find key words in every passage.
Тема 3: HOW FUNDS FLOW THROUGH BUSINESS
Exercise 1.Прочитайте и выучите слова:
to purchase assets - покупать собственность, имущество
operating costs - операционные издержки
employee salary - зарплата работникам
property taxes — налоги на имущество
license fees - плата за лицензию
fixed costs - фиксированные издержки
variable costs - переменные издержки
on the cash basis - на наличной основе
to use credits — использовать кредиты
to pay the mortgage -выплачивать издержки
leverage —соотношение величины заемного капитала и основного капитала-
запаса товаров и суммы капитала, соотношение вложений в привилегированные и обычные акции
cash reserve — резерв наличности
availability of cash — доступность наличности
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idle cash — незанятая (свободная наличность)
to draw the interest — получать процент
Exercise 2. Read and translate the text and find out:
1. What is money used for in the enterprises?
2. What are the types of cost?
3. What payments does an entrepreneur have to make?
4. What basis do some of the small enterprises operate on?
5. How does the use of credit affect the business?
6. Does an entrepreneur always need a cash reserve?
7. How can a company draw the interest?
8. What are the securities?
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