The credit agreements of commercial banks, savings banks, financial companies, insurance companies and investment banks are very different and all have a different purpose. “Commercial banks” and “savings banks”, because they accept deposits and benefit from FDIC insurance, generate credits that incorporate the concepts of “public trust”. Prior to intergovernmental banking, this “public trust” was easily measured by public banking supervisors, who were able to see how local deposits were used to finance the working capital needs of local industry and businesses and the benefits of using this organization. “Insurance institutions” that collect premiums for the provision of life or claims/accident insurance have established their own types of credit agreements. Credit agreements and documentation standards for “banks” and “insurances” were developed from their individual cultures and were governed by guidelines that in one way or another addressed the debts of each organization (in the case of “banks”, the liquidity needs of their depositors; in the case of insurance organizations, liquidity must be linked to their expected “claims”). “investment banks” create credit agreements that meet the needs of the investors whose funds they wish to attract; “Investors” are always demanding and accredited organizations that are not subject to bank supervision and are subject to the need to respect public trust. Investment banking activities are supervised by the SEC and the focus is on whether the information is properly or correctly disclosed to the parties providing the funds. Credit agreements are usually written, but there is no legal reason why a credit agreement should not be a purely oral agreement (although oral agreements are more difficult to enforce). However, there are different subdivisions within these two categories, such as interest loans and balloon loans. It is also possible to sub-note whether the loan is a secured loan or an unsecured loan and whether the interest rate is fixed or variable. Before entering into a commercial credit agreement, the borrower first makes statements about its nature, solvency, cash flow and any collateral that it may mortgage as collateral for a loan. These presentations are taken into account and the lender then determines the conditions (conditions), if necessary, he is ready to advance the money.
The forms of credit agreements vary enormously from sector to sector, from country to country, but characteristics of a professionally crafted commercial credit agreement contains the following terms: for commercial banks and large financial firms, “credit agreements” are generally not categorized, although “credit portfolios” are often roughly divided into “personal” and “commercial” credits, while the “commercial” category is then classified as “industrial” and “commercial” Real estate loans are divided. . . .