Funded Facilities

Overdraft

AUB Overdraft (O/D) facility is designed for allowing monetary and financial facilities to institutions and organizations which helps in managing their day to day working requirements. Accordingly, the bank has estimated a credit limit and allows the client to borrow a certain amount from the bank. The customer can utilize the limit sanctioned on the OD account and can either credit the sale proceeds on the same day without incurring any interest costs or on subsequent days. Interest is charged on the daily basis on the overdrawn amount only while it’s deducted from the borrower’s account at the end of the month.

 

Characteristics of Overdraft Loan

  • It is short-term (usually up to 12 months) credit facility which is usually renewable on a yearly basis
  • The designated amount for Overdraft loans is up to USD 4,300,000
  • The interest rate starts from 10% – 18% per year
  • The interest will be charged on the overdrawn amount only
  • This type of loan pertains to those who are usually doing business in manufacturing/ trading or engaged in import/export businesses etc. and requires fund for working capital
  • It is allowed against hypothecation of stocks/ assignment of receivables and other secondary collaterals.

 

Overdraft Loans required documents

In case of settlement over the use of this facility, the consumer should hand over the following documents to Afghan United Bank Credit Department:

  • Loan Application
  • Valid Business License
  • Article of Association (Assas Naama)
  • Company Profile
  • 3 years Business plan
  • 3 years Audited Financial Reports
  • Copy of Contracts in hand
  • Tax Payment Documents
  • Customs Documents Available sales/purchase Contracts
  • Legal Documents of property in the name of the borrower (which will be submitted with the bank as a guarantee).

 

Term Loan

A Term Loan is a loan from the bank following an agreement for a specific amount of facility which has a specified repayment schedule and a fixed or floating margin rate. Obtaining a long term loan provides a business entity with requisite capital that can be used for purchase of assets, inventory or equipment/s which can then be used to create additional income for the business.

 

Such loan facilities are considered for more than one year. Term loan facility is suitable for those who intend to invest capital for a long term in order to generate long term facilities. Long term loans are suggested to purchase fixed assets, construction of commercial buildings, construction of manufacturing factories, purchase of vehicles, stocks, raw material etc. As mentioned, such loans are repayable in a fixed term. The repayment tenure is between 12 to 36 months. The tenure and the amount of repayment of the loan are fixed according to the margin rate and income coverage ratio on fixed debt.

 

Characteristics of long-term Loan

  • Tenure ranges from 1 year to 3 years to and is not further extendable
  • The loan amount is up to 4,200,000 USD
  • The interest rate varies from 10% to 18% per year
  • The repayment of this loan with margin usually takes place on a monthly/ quarterly basis from the date of loan execution to its expiry
  • The assets created are hypothecated/ mortgaged to the bank along with other collaterals as secondary security.

 

Documents required for long term loan

In case of settlement over the use of this facility, the consumer should provide the following documents to the Credit Department of Afghan United Bank:

  • Loan Application
  • Valid Business License
  • Article of Association (Assas Naama)
  • Company Profile
  • 3 years Business plan
  • 3 years Audited Financial Reports
  • Copy of Contracts in hand
  • Tax Payment Documents
  • Customs Documents Available sales/purchase Contracts
  • Legal Documents of property in the name of the borrower (which will be submitted with the bank as a guarantee).