S2. Costs of Lending ,read this part through the workbook and write Essay

S2. Costs of Lending ,read this part through the workbook and write down the understand of the . Costs of Lending - Essay Example Money can be made in profit if the measures employed in ensuring that the payment of money are clear so that money can compensate and be relent again. Costs are undergone and lending money this because if the money is not paid the agency undergo major costs if were enough collateral repay the cash A cost of lending is a thought that should be put under consideration when one is undertaking any money lending transaction. For this reason the costs of lending are the real consequences that are faced by the commercial institutions during and after lending money to organizations or individuals (Leila 2011). There are several hard ships and expenses that are undergone during the process of lending money. This might involve the bank into ending into very dangerous bad debts which will make the bank work at a loss which is highly dangerous for any commercial institution. Commercial and Corporate Lending As to my research commercial lending is the process by which money is lent to an establis hed organization as credit so that the operations taking place in the organization can proceed (Lance 2002). This money is lent to the business entity so as to give a hand in the operational expenses in the organization and also other forms of capitals required in the organization (Lance 2002). ... that when loans are secured from a commercial institution the first thing that they feature is attaining collateral from the party who requires the loan. Under my opinion corporate lending is just identical to getting a personal loan it is only that the money transaction will not take place between the bank and the person but it is normally made from the bank to a company. This lending is usually used with the involvement of the asset, structured finance or through the help of the cash flow (Kaplan 2008). For this reason this risk of one attaining a non payable amount of cash is discouraged because the person who requires the loan will receive a share that is directly proportional to the assets owned by the individual or company. Commercial Lenders Commercial lenders are the financial institutions that lend money to organizations and individuals with hard collateral being put in place as security to the loan (Kaplan 2008). These lenders include commercial banks, private lending insti tutions, hard money lenders and also financial groups that have enough amounts that can be used to lend. They have their own policies each that govern the transactions involving money so that they can evaluate the persons who are capable of getting their loans (Kaplan 2008). The commercial lenders are extremely attractive and one can access them through brokers who direct them to the money lenders. The brokers earn from looking for customers which is solely catered for by the customer or the borrower. Importance of Commercial Lenders The commercial lenders give the organizations and other individual who require cash in order to build and uplift the living conditions of the countries and the societies where they live. This will lead to growth and expansion of the country and the societies