The Rates of Financing Products
Last updated 31 May 2023
Examples of the method of calculating the profit margin for financing (working capital & long term)
Example #1
| Financing type | Short term finance (Working capital) |
|---|---|
| Finance Calculation Method | Amount * Annual Profit Ratio/360 * number of days |
| Amount | SAR 1,000,000 |
| Period | 4 months |
| Percentage of administration fees (per use) | 1% |
| Annual Profit Ratio | 10% |
| Profit Calculation Method | Bullet Repayment at the end of period |
| Number of financing days | 120 days |
| Profit during financing period | SAR 33,333 |
| Amount of administration fees (per use) | SAR 10,000 |
Example #2
| Financing type | Long term financing |
|---|---|
| Finance Calculation Method | Amount * Annual Profit Ratio * Number of Years |
| Amount | SAR 1,000,000 |
| Period | 3 years |
| Percentage of administration fees (one time) | 3% |
| Annual Profit Ratio | 7% |
| Number of financing days | 360 (one year) |
| Profit for one year | SAR 70,000 |
| Profit for 3 years | SAR 210,000 |
| Amount of administration fees (One time) | SAR 30,000 |
Example #3
| Financing type | Long term financing |
|---|---|
| Finance Calculation Method | Amount * Annual Profit Ratio * Number of Years |
| Amount | SAR 3,000,000 |
| Period | 2 years |
| Percentage of administration fees (one time) | 3% |
| Annual Profit Ratio | 7% |
| Number of financing days | 360 (one year) |
| Profit for one year | SAR 210,000 |
| Profit for 2 years | SAR 420,000 |
| Amount of administration fees (One time) | SAR 90,000 |