A wholesale bank is a type of financial institution that provides secured funding to businesses on a large scale. Wholesale banks provide loans to large corporations, investment companies and other financial institutions. Wholesale banks also manage customers’ assets, buy and sell investments and provide financial advice.
Wholesale banks differ from traditional banks in that they do not necessarily provide services to the general public. Instead, they are tailored toward large commercial borrowers who need to borrow sums of money greater than normal banks will provide. Wholesale banks also typically focus on specialized areas of finance such as investment banking and venture capital.
The main advantage of using a wholesale bank is the ability to access large sums of money that regular banks may not be able to provide. This type of financing comes with many advantages such as more flexible terms, lower interest rates, and the ability to customize loan amounts to the specific needs of the borrower.
Another benefit of wholesale banking is speed. As traditional banking involves a lengthy process for application and approval, wholesale banking institutions can offer approvals within days. Financial instruments such as bonds can be sold quickly due to the high liquidity of the wholesale banking markets.
In addition to providing large loans, wholesale banks can also offer asset management and trading services. They are able to buy and sell securities such as stocks, bonds, and commodities as well as foreign currency. In some cases, they provide their customers with customized financial advice and capital market analysis.
Wholesale banks are ideal for large corporations, investment companies, and financial institutions that need the ability to access large sums of money. As these banks focus on specialized areas of finance and offer quick application and approval times, they are an invaluable source of financial assistance.
