Credit is an important element of the relationship between the bank and the enterprise. Apart from the classic considerations around capital structure and its determinants, the approach to credit as a form of debt contract has substantial theoretical and practical advantages. This becomes apparent when the choice of a company´s financing strategy, or the strategy of competing in either the product and the suppliers´ market is discussed. Credit should be regarded as an instrument of corporate governance, which is not only exercised by the owners but also by creditors.

Growing competition in the credit market and the new forms of financing force banks to act more and more flexibly. This refers in particular to Polish banks, which still operate in a rather conventional manner. With them, credit-extension procedure often boils down to a more or less simplified credit analysis, or even the correct completion of the credit application form. However, competition increasingly often forces banks into negotiation of credit term. These negotiations do not solely concern the amount, due date or interest charged. They may refer to other aspects of credit, such as the type and value of collateral, additional clauses (covenants) referring to the company´s conduct while the investment project is in progress, principles for control of this conduct or conditions for the reopening of credit negotiations.

In spite of the significance of the other attributes of credit, the interest rate - or, more broadly, the cost of credit - remains at the focus of credit negotiations.

The paper aims to present the basic theoretical assumptions and methods of credit valuation, applied primarily in the relations between banks and corporate borrowers. Such considerations set out from the theory of transaction costs, which provides for a definition of the specific costs of preparation, implementation and monitoring of credit transactions. The following pricing methods have been presented: cost pricing, pricing through reference to interest rates in alternative markets, prime rate valuation, market valuation, relational valuation and its variations, valuation based on the internal rate of return on the credit, risk-ased valuation.

The presentation does not cover all the methods; it rather serves as an introduction and call for further research. It does, however, aim to emphasize credit price as the focus of negotiations between banks and their clients under competitive financial markets.