Which word?

Credit vs. Loan

Consider the pros and cons of opening a line of credit from a bank versus securing a loan. Credit Pros: Improves cash flow and financial independence; Only have to pay interest on the amount you’ve spent, not on the total amount of credit line; Usually easier to qualify for a line of credit than for a commercial loan; Easily accessible funds for emergencies; Builds business credit; Cons: Temptation to spend beyond ability to re-pay; Potential for high interest rates; Not best-suited for buying equipment or real estate; Can become entangled with personal credit; Deepening of debt; Loans Pros: Lower interest rates than credit; Fixed borrowed amount; Better choice for making equipment, real estate and other significant purchases; Potential for credit repair or improved credit score by paying off balance; Availability for loans to be tailored to give advantages to small businesses; Cons: Acquiring approval for a bank loan is more difficult than getting a business credit line; If your business fails, it might be necessary to sell other assets to re-pay debt; Acquiring a large amount of debt at once; Not as flexible as credit; does not work to improve cash flow.

b) Translate into Ukrainian paying special attention to the words in italics.

1. He exceeded his credit limit.

2. I don’t like buying things on credit.

3. Jim took out a loan to pay for his car.

4. The bank refused to extend their credit.

5. Borrowers can take out a loan for £84,000.

6. How soon do you have to pay off the loan?

7. You can get interest-free credit on all our products.

8. The group can’t get credit to buy farming machinery.

9. Some suppliers will not give credit to their customers.

10. The country has no access to foreign loans or financial aid.

11. Kenya was still paying off a multimillion-dollar loan to the IMF.

12. The president wants to make it easier for small businesses to get bank loans.

13. You can ask a dealer for a discount whether you pay cash or buy on credit.

14. Senator Bill Bradley outlined his own tax cut, giving families $350 in tax credits per child.

15. Japan has provided about $2.5 billion in credits to Russia and about $50 million in direct aid.

Task 14. Translate into English.

1. Банк – це місце, де ми можемо тримати свої гроші у безпеці. 2. Банки впливали на економіку та політику впродовж століть. 3. Сліди банківської діяльності можна віднайти у стародавні часи. 4. Термін “банк” походить з італійської мови. 5. Перші банкіри вели свій бізнес за столами, покритими зеленими скатертинами. 6. Банківська галузь у 21 столітті є надзвичайно конкурентною. 7. Банк – це фінансова установа, яка приймає безстрокові вклади і надає комерційні позики. 8. Термін “банк” суто технічно стосується комерційного банку. 9. Ощадно-позичкові асоціації, взаємно-ощадні банки, кредитні спілки не є банками, а ощадними установами (ощадними касами). 10. Першочерговим завданням банків було надання позик торговельним компаніям. 11. Упродовж століть банки мали справу лише з торговельними підприємствами, а не споживачами. 12. Сучасні банківські послуги спрямовані також і на фізичні особи. 13. Більшість банків – це комерційні приватні підприємства. 14. Центральні банки зазвичай перебувають у державній власності. 15. Центральні банки контролюють комерційні банки, а також касову відсоткову ставку. 16. У випадку кризи центральні банки діють як кредитори останньої інстанції. 17. Позичкова діяльність забезпечує основну частку доходів комерційного банку. 18. Банки є важливими гравцями на фінансових ринках. 19. Банки та ощадні установи зазнають багатьох форм ризику. 20. Банківські кризи виникали багаторазово впродовж історії.

Task 15. Answer the following questions.

1. What spheres of human life have banks influenced for centuries?

2. Does banking date back to ancient times?

3. Is having a bank account a commonplace these days?

4. What is the origin of the term “bank”?

5. When was the first modern bank founded?

6. What makes the banking industry highly competitive these days?

7. Why does the term “bank” technically refer only to a commercial bank?

8. What was the primary purpose of banks?

9. Has the banking industry dealt with consumers for centuries?

10. How can bank activities be divided?

11. Who does retail banking deal with?

12. What branch of banking is directed at large business entities?

13. Are there non-profits among banks?

14. What are central banks usually charged with?

15. Which banking institution acts as the lender of last resort in event of a crisis?

16. How does a bank generate a profit?

17. What activities provide the bulk of a commercial bank’s income?

18. What other financial activities do banks perform?

19. What forms of risk are banks and risks susceptible to?

20. Have banking crises developed many times throughout history? What are the recent examples?

Task 16. Say what you know about:

1. The origin of the word “bank”.

2. The activities of early bankers.

3. Types of financial institutions.

4. Branches of banking in the 21^st century.

5. The importance of central banks.

6. Many forms of risk banks are susceptible to.

7. The reasons and consequences of financial crisis.

8. The most prominent banking crisis.

Task 17. Write a composition on one of the following topics.

1. Money answers all things.

2. Of evils upon earth, money is / isn’t the worst.

3. A piggy bank vs. a bank account.

4. Banking crises: the trouble for moneybags or the overall disaster?