Marketable long-term securities Interest rate swaps Hybrid securities 1. Interest payment is tax deductible 2. Long-term loans Banks, merchant banks, life insurance companies, and other institutions are providers of business loan.
Banks are the largest provider.
Fixed borrowing can be achieved by swap transactions. A mortgage loan requires a borrower to pledge property as security for a loan. The main source of mortgage finance for companies has been life insurance companies, superannuation funds ans trustee companies. Typically mortgage loans are made on a credit foncier basis, which means that the principal is repaid over the term of loan. Negative pledge loan is made on an unsecured basis with a negative pledge provision in the loan agreement.