What are direct credits

2022-04-30 0 By

Business stores sell on credit to customers, businesses issue bonds, corporations issue stocks.1. Direct credit There are great differences in the purpose, amount and term of borrowing.The main purpose of borrowing is not to solve temporary living difficulties, but to meet the need for productive capital.With the further expansion of commodity production scale, some capital demand problems also appear in the process of capital circulation and direct credit turnover.For example, some enterprises have goods for sale, and the enterprises that need such goods are short of cash to buy.2. In the process of selling goods, the credit granted by one enterprise to another enterprise is commercial credit.If raw material manufacturer grants product production enterprise, or product production enterprise grants product wholesaler, product wholesaler grants retail enterprise credit.Commercial credit is provided in the form of advance payment on credit.Direct credit refers to the borrower, and indirect credit refers to the guarantor.Direct credit and indirect credit together constitute the total credit of the whole society.Direct credit mainly refers to commercial credit, stocks and bonds.The development of indirect credit has broken the limitation of direct credit.The bank may use all deposits as a whole to support production, circulation and other undertakings, irrespective of the amount of deposits deposited by individual depositors.