Companies operating in Hungary have various means of financing their operations, though the options are rather limited compared with those in Western Europe. Indirect financing or borrowing is used more than direct self-financing. The market for bank credit is dominated by short-term financing, but demand for longer maturities has increased with the improving performance of the economy and the growing number of small and medium-sized companies (SMEs) seeking credit. The most common short-term financing techniques for domestic and foreign companies are overdrafts and short-term loans. Medium- and long-term credit can be obtained from most local banks, which usually take guarantees from foreign parent companies or any type of liquid collateral from a local borrower. Large companies increasingly raise syndicated or club loans if the credit amount is high.
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