Corporate Banking Products – Short-Term Finance

This course focuses on short-term finance. It explains the cash conversion cycle and how this, and timing mismatches between cash inflows and outflows, give rise to the need for short-term funding. The course describes, in detail, funded short-term credit products, such as overdrafts and short-term loans. It outlines the key features of these products and how they are aligned with the needs of a corporate business. The risks arising from providing these different products are also described, as well as how these risks are managed by assessing appropriateness, right-sizing, and monitoring usage.


    On completion of this course, you will be able to:

    Identify the various sources and uses of cash for corporates

    Recognize the key features of overdrafts, including drawings against uncleared effects, and short-term loans

    Identify the risks associated with short-term finance and how these risks are managed


    Topic 1: Short-Term Finance & Business Needs

    What is Short-Term Finance?

    o Tenor

    o Availability

    o Cost

    Why is Short-Term Finance Important?

    Assessing Business Needs: Cash Conversion Cycle

    Cash Conversion Cycle & Net Working Capital Days

    o Accounts Receivable Days

    o Inventory Days

    o Accounts Payable Days

    Sources & Uses of Cash

    o Stockholders

    o Term Finance Providers

    o Asset Purchases/Sales & Investments

    o Deposits

    o Taxes

    Assessing Business Needs: Cash Flow Forecasts

    o Short-Term Forecasts

    o Longer-Term Forecasts

    o Stress Testing

    Topic 2: Aligning Products with Business Needs

    Determining Product Suitability

    o Timeframe

    o Source of Repayment

    o Purpose

    o Size of Funding Requirement

    o Timing of Cash Flows

    o Cost

    Short-Term Finance Products

    o Revolving Facilities

    o Short-Term Loans

    o Other Products

    Revolving Facilities

    o Overdrafts

    o Overdrafts in Practice

    o Drawings Against Uncleared Effects (DAUE)

    Short-Term Loans

    o Profile

    o Business Needs

    • Funding the Production Cycle

    • Agricultural Loans

    • Bridging Loans

    Topic 3: Product Risks

    Managing Short-Term Finance Product Risks

    Setting Overdraft Limits

    Monitoring Overdraft Usage

    Managing Short-Term Loans



    75 Minutes

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