CALCULATION METHOD OF COMPANY FULL LOAN VALUE TAKING INTO ACCOUNT INCOMING CASH FLOWS

O Dobrovolskij

doi:10.18371/fcaptp.v2i25.135974

Abstract

Financial intermediaries with the purpose to sale effectively their loan products successfully combine credit a reduced interest rate on the loan and increased commission, compensate expenses at the expense of insurance companies, raised rates for cash management services and other derivatives of loan services. Despite that, the calculation of full loan value has binding effects only in the provision of consumer loans to commercial banks.The article substantiates the need for financial institutions to inform companies about the estimated total cost of financing. The tax shield is taken into account as input cash flow of the borrower- legal entity in determining the full loan value. Depreciation protection, by analogy, is defined as a part of algorithm calculation which takes into account credit conditions in the process of renewal of fixed assets.

Highlights

Financial institutions are counterbalanced by the cash flow of subjects, which have surplus liquidity and those which need external financing, executing the intermediary function
Substantial changes are in the structure of bank market, which became investigation of global economic crisis, political instability and public tension, entailed the sharp slump of trust to financial a sector.It in the same time negatively influenced on the increase of resources
Inflationary expectations, shortage of resources and absence of trust of users of holdings services, are instrumental in the increase of interest rates after the passive products of financial mediators.interest rates rise after active products

Summary

Introduction

Regulatory documents require financial institutions to do so only in the process of consumer loan services. The goal of this research is to substantiate the possibilities of using tax and depreciation shield when calculating the estimated total loan value for the companies. Formula 2 takes into account only those payments which are made by the borrower in the process of loan services.

Objectives

Results

Conclusion