Finance instruments that can make your project happen The Mega Base Funds improves people’s lives by providing finance and expertise for projects supporting innovation, SMEs, infrastructure and climate action. Our extensive lending, blending and advisory capacities are at the service of all who reach our capacity in different countries.


Lending

Lending is our main activity. We use our financial strength to borrow at good rates. We pass the cost advantage onto economically viable projects that promote EU policy objectives.

Blending

Our smart tools help clients blend our financing with additional sources of investment, Mega Base Funds provides various financial services in The World. We acts as a guarantor and endorser of commercial promissory notes. The company also offers proprietary trading, brokerage, approval, and underwriting services for short-term negotiable instruments and financial bonds. In addition, it provides corporate financial consulting services; proprietary trading services for government and corporate bonds, as well as fixed income securities; transaction services for derivative financial instruments; and investment services for equity instruments and fixed income securities.

Advising

Companies or public authorities can call on our financial and technical expertise through the Mega Base Investment Advisory board that works to ensure better knowledge-sharing and to guide you to the right people for your project, Mega Base Funds is a global deal origination platform that connects qualified investment opportunities to institutional providers of capital. With MBF, financial services companies have access to thousands of screened, high quality deals which are relevant to their clients, Mega Base Funds is used by leading financial institutions across North America, Western Europe, APAC and the Mid East, MBF is the fastest growing investment network on the globe.

WHAT IS CASH CREDIT?

Cash credit is a facility to withdraw money from a current bank account without having credit balance but limited to the extent of borrowing limit which is fixed by the commercial bank. The interest on this facility is charged on the running balance and not the borrowing limit which is given by bank, This is a very common facility by banks. It is one of the important short term source of finance for a business. The availability is also not very difficult. IMPORTANT FEATURES OF CASH CREDIT FACILITY BORROWING LIMIT

Cash credit facility is bound by a limit specified by bank. The borrowing limit is determined based on the drawing power of the borrower. Drawing power is calculated using book debts, inventories and creditors. Till this limit is not exhausted, the borrower can withdraw and deposit funds any no. of times. INTEREST ON RUNNING BALANCE Unlike other types of debt financing products of banks like loans, the interest is charged on the running balance of the cash credit current account and not on the sanctioned amount. It is a tremendous motivation for the borrower to collect money from the debtors as soon as possible and deposit in the current account. It is as good as investing the surplus funds at the interest rate which he pays on the cash credit limit. MINIMUM COMMITMENT CHARGE Normally, a bank would wish some amount of interest to flow in whether a cash credit account is utilised or not. It’s very obvious from bank’s point of view as it is blocking some amount of its ‘float’ for the borrower. For example, in a 10 million cash credit limit, 2 million may be the minimum usage level below which there would be no interest waiver. If the balance goes to 1 million, interest will be calculated on 2 millions only.

SECURITY

A cash credit facility is extended against a security. Securities may be in the form of stock, debtors, etc as primary security and fixed assets and other immovable properties etc as collateral security. VALIDITY OF CREDIT PERIOD The limit allowed is valid for say 1 year and then the drawing power will be re-evaluated. One year is just an example whereas in some cases, it may be evaluated every quarter. BENEFITS OF CASH CREDIT The most important benefit of cash credit is its flexibility of deposit and withdrawals. Due to this, a borrower can save a lot of interest cost by depositing the extra cash available with him. It also keeps the borrower motivated towards collection from debtors which will not only expedite the cash cycle but also bring a disciplinary effect on the debtors and borrower himself.

DISADVANTAGES OF CASH CREDIT
The primary disadvantage is that securities required should be adequate and the adequacy is evaluated time and again which increases administrative work for the business.

FINANCIAL LEVERAGE AND TERM LOAN

At times, an important reason for selecting term loan is financial leverage. By opting for debt finance like term loan, a company tries to magnify the returns to their equity shareholders. This help management of a company achieve the core objective of wealth maximisation for its shareholders and also preserve the control and share of existing shareholders.

LOAN IN ANY CURRENCY

These loans are provided both in the home or foreign currency. Home currency loans are offered normally for a purchase of fixed assets such as land, building, plant and machinery, preliminary and preoperative expenses, technical know-how, working capital etc. On the other hand, foreign currency loans are offered for import of certain plant or machinery, payment of foreign consulting fee etc.