For an effective collection is essential to have knowledge of the purpose and use of each instrument to promote and secure credit because they constitute the basic tools to support work professional each transaction of this nature includes and represents the security and the creditor's right to receive payment.
Trade credit is generally used in securities such as bills of exchange for his versatility and knowledge in the area, the credit card, the Promissory Notes or the Warrant are used in the financial system security instruments in the granting of bank credit, credit operations and business customers frequently to increase their working capital, purchase goods or increase their assets. It is our understanding that the versatility and use of securities, assume the virtue of providing marketing of goods and services as the holder of the credit, do not have to notify its transfer to the debtor. Deserves special attention as a title check value to ensure loans in special circumstances and that its use is common in local trade.
But what is a securities?, Under the law is a document that contains a wealth of private law intended to run in compliance with the formalities established by law. Is a necessary tool to enforce the law literally and self-contained in that document.
Another instrument used by banks and financial institutions is the Letter of Guarantee and Learsing or lease, the bank guarantee as a form of special credit, since the new law on banks and financial institutions considered as active and as the name assume the characteristics of credits. Similarly Invoice Factoring as compliance and new forms of financial instruments.
documents also have well-known in commercial practice such as invoices, receipts, and private contracts that are usually considered as debt instruments between traders and customers.
can not be denied the speed and volume of commercial transactions in modern times requires trade, makes every day are required legal instruments, mechanisms and appropriate markets for the movement of capital, able to provide legal certainty and effective and efficient delivery of care business.
Before describing the characteristics of each of the credit instruments, knowledge of the use thereof by the employer can be classified into short-term loans, medium and long term. This can be treated for giving credit to the funding it. However, in the trading system is not well known credits long term.
then analyze them either one by one:
13.1. POINT OF CHANGE
is a credit instrument that tests required by its mere existence, without being necessary to consider the causes that gave rise, considering this ground as a tool for abstract and autonomous.
addition, the bill of exchange has the characteristic of the payment order, and that through it a person who has a claim against another and that is not expired but will expire, may be financed through a bank or a future date assume that a third party debt in solidarity. Also, the bill of exchange is the title higher value employment in the business.
The letter serves to support trade credit purchase, or as collateral for short-term. Likewise, the letter can be endorsed because it is a paper currency and finance because it is accepted in the banking and financial system as a tool for collection.
The letters also can be backed up, secured and guaranteed. Are endorsed when its business and its acceptance are paid by individuals or corporations the same as by accepting, consisting this in the relevant securities. Is to strengthen when backed by a letter of solidarity bond, irrevocable, unconditional and immediate implementation, issued by a bank or financial. Is guaranteed when its release have specific additional safeguards.
bill of exchange, to be valid as such and in accordance with securities law can only be rotated:
Requirements
According to securities law Securities and bill of exchange must contain:
1. The term bill of exchange or other equivalent.
2. The unconditional order to pay a certain amount of money.
3. The name of the person in charge of turning point.
4. The expiration date.
5. The indication of place of payment.
6. The name of the person to whom payment must be made.
7. The indication of the date and place of issuance of the letter.
8. The name and signature of the person issuing the letter.
13.2. PAYING
a security is suitable for documenting credit direct cash obligations between a creditor and a debtor, the latter being where the note is in favor of the former. Unlike the bill of exchange that is a security causal order, ie in this document are agreed the conditions that give rise to the claim, including in it the collateral that secures the obligation, giving him an advantage over point as to minimize the risk of a credit covenant because this compelled to point out the cause and ensuring as optional.
The promissory note is almost always used to obtain bank credit for being a security point most complete, but commercial use is increasingly widespread and accepted. Hence the name of bank notes and commercial. In this lending is recognized that the interest payable will be the default interest and compensation. It should also take into account that the default interest, to be charged, must be compact, otherwise only be receivable compensatory interest or otherwise in legal interest.
The note has a term not less than 30 days nor more than 180, which can be either renewable.
Requirements
is a debt issuing general deposit warehouses. The deposit certificate evidencing ownership of the goods or items left in the store that issued the title.
The Warrant is a test title and the presence of a claim of lien on the goods or property as specified in the "Certificate of deposit" for. This Certificate is issued by the Warehouses that certifies the ownership of the goods and merchants deposited in the warehouse. Goods delivered to stores must be insured against fire or other disaster or emergency presented. The holder of the warrant certificate and may sell the goods, without having to physically deliver it to the buyer because it is enough to make delivery of the certificate and the respective Warrants.
is appropriate to note that by endorsing a warrant, the creditor has a preferential right over any other creditors that their loans will be paid, may in case of failure to make forced to auction the goods, rights not invalidate or even bankruptcy, disability or death of the obligor, and the Warrant is solid warranty.
You can also occur if the holder of the Warrants can certificaos and collateralized loan request with the documents that makes consideration of the entities that require these guarantees to give their credit.
This instrument is often used by industrial companies rather than by trade or service, because it has more advantage in obtaining loans using as collateral their finished products.
However, the wholesaler, you can also leave deposit their merchandise sales are seasonal and do not necessarily need them, but to a new sales campaign. Additionally, the title means Warrant, Certificate of deposit indicates the characteristics of the property deposited in the store, both can be endorsed or used as security documents.
Requirements
consider a direct short-term credit and its use is by credit card used as payment methods. The advantage of this type of loan is that it is versatile and practical for use. Its operation and moving it takes money to call it "plastic."
financial institutions make loans to managers or owners of the enterprises based on income amounts determined to be handled in savings accounts and / or checking accounts. Its use is oriented to obtain credit in the short term, especially for consumer goods and services.
Assuming a classification, we can say that in our environment are outstanding bank credit cards and business credit cards, although both are aimed at meeting the credit needs of the users we can say that there is marked difference between them. No credit cards or commercial bank lending is characterized by revolving, ie lines that are activated as the client is canceling their quotas. The amounts granted are variable and that these respond to customer qualification, availability and management of financial institutions.
We can affirm that the commercial credit cards are differences in the bank because they are less risky, for that reason the interest rates are lower.
Requirements
This is not a negotiable document under the terms of the security, but the right arising from the letter is assignable, as any economic right, after notification of the assignment to the debtor, or the issuing bank from paying.
the bank security is a secured document and is personally guaranteed by debtor and creditor with specific responsibility of the issuing bank, who will be required to answer for the debt if the debtor defaults.
is very common to use letters of guarantee and guarantees to third parties, is required use in bidding participation or support for the performance of work or business, there various uses, such as contract signing, advance bail guarantee of payment, etc.
letters are supportive bonds, irrevocable and automatically. Just a creditor of the client's delivery of a notarized notice to the bank, on behalf of this, have to pay.
This instrument is little known in the business but common to see its effectiveness in supporting trade credit obligations.
Requirements
constitutes a form of medium-term credit is allowed in the trade because is a contract for the lease object or location of movable and immovable property acquired by a third party lessor company for the use of the lessee. This Agreement transfers to the lessee contract transfers all benefits and risks inherent in the ownership rights to the leased asset. States that the financial operation is generally learsing made between legal persons and that tax has some benefits, not so for natural persons. By paying regular installments and an option for the lessee to buy the goods at a value agreed.
has to specify that the lessor is a company Financial, while the Tenant shall be a legal person. The main characteristic Learsing flexible in its structure of periodic payments that are perfectly suited to the needs of each user.
This feature adds three basic options that may be available to the lessee at the end of contract period: First, the tenant may choose to buy either a residual value. The second option is to extend or renew the contract and, as a third possibility the contract expires with no further obligation to lease can be a domestic or foreign.
should also be noted that this financing mechanism is based on two distinct features of the property subject to security: the ownership and use. Because the company buys the right to use an asset for a predetermined time without the need to commit to purchase. In this way the user company is in leasing and ownership entity, a landlord. The Learsing comes to a commercial contract, yet typical, reciprocal and expensive, have a continuous duration in time.
Elements Involved in the Learsing
This financial instrument credit allows a natural or legal person can access a credit line of medium and long term to finance acquisition of fixed assets.
here plays as a fundamental guarantee the mortgage. The contribution of the Bank or financial institution will be up to an amount of 75%, while the applicant provides the other 25%. The limit the credit is allocated according to the monthly capacity to present the credit applicant. An important feature is that the bill may be traded on the Stock Exchange. It is also important to note that these credits can be both legal persons in case of commercial enterprises, as dependent and independent individuals, provided they maintain a significant income and meets the requirements of the bank. A variant of this instrument is the negotiable mortgage title and becomes support for merchants who have property and wish to arrange bank loans.
Requirements
Factoring is one by which a financial institution known factor undertakes to buy (outright purchase) Current Assets such as the Bills, Notes, Invoices and credits (outstanding liabilities) whose ownership corresponds customers as a result of the operations of marketing goods or services made by these third parties, for a certain sum.
In simplest terms, is an operation or financial management technique by which an employer handles the exclusive claims against third parties that results in its business to a factor which may be a bank or financial , which is responsible for managing and accounting for such credits, which can assume the risk of insolvency of debtors of the receivables, as well as the mobilization of such by the advance of those in favor of his client. This operation involves both the customer and the billing company also called Factor. (Financial Company or the Bank that authorized by law).
If the company has working capital, but customers have asked for financial solvency and advance payments on account of orders, these documents may be established as instruments of collateral for credit in the banking system. This allows rapid attainment of short-term liquidity, the same can serve as backup for commercial operations by the company or client. Factoring in turn is divided into the following categories:
1. Factoring financing.
2. Factoring without funding.
Requirements
1. Factor
2. Factor.
3. Guarantee documents.
4. Contract.
13.9. COMPOSED BILL
This is also a credit financial instrument designated as negotiable instrument that has the same nature and characteristics very different from the Commercial Invoice. The only similarity we find is that the described property and credit sales transaction documents contain both belong to the same transaction. A of advantages over the bill of exchange or promissory note is that the bill is made up title causal value, because it provided evidence of the existence of a commercial transaction that creates or causes the issue, outlined in detail the subject of trade goods credit which represents partial or full payment, and constitutes acknowledgment of receipt of such property by the debtor, with the deferred payment agreement. It also represents the security right on the property described in the title.
For the retailer will have more confidence this new title-value because it is very easy to prove the cause of law and also to keep on goods sold on credit, preferred security interest that is not achieved by simply using the letter. In short, we can say that the factory made a negotiable instrument caused nominative and transferable by endorsement, also represents the right to claim arising in the commercial transaction that arises, and the preferential right of pledge on the goods described therein title, whose price has been deferred payment with a guarantee of their own property.
Requirements
1. Made up the name Bill.
2. Place and date of issue.
3. Name or corporate name of the seller.
4. Detailed description of the goods sold.
5. Unit prices and totals of the merchandise.
6. The amount paid by the buyer.
7. The expected date for payment.
8. The signature of both seller and buyer.
13.10. ORGANISE CREDIT
Within active operations of banks, credit syndication is a new form of syndicated loans that promote a number of national and foreign banks to a company that requires financial resources of great value, which is usually long term.
This appropriation is apportioned under the same terms and conditions for an individual credit agreement.
These loans are offered under a single interest rate and the same guarantee, the banks participating in the unionization are united in the performance and accountability.
The syndicated loan participants includes all types of institutions institutions, including international banks or banking agent being a leader who leads and coordinates the amounts, timing and facilities payments and the recipient of the funds until the maturity of the projects implementation.
syndication credits is under the new banking law and enter to work as a form of bank credit as of July 1992. Today many business enterprises in our country are asking syndicated loan from foreign bank branches, especially by low interest rates and extended financing terms.
While this credit mode is new, not others indicate that their knowledge in the commercial sector is required for credit transactions even within the country.
Trade credit is generally used in securities such as bills of exchange for his versatility and knowledge in the area, the credit card, the Promissory Notes or the Warrant are used in the financial system security instruments in the granting of bank credit, credit operations and business customers frequently to increase their working capital, purchase goods or increase their assets. It is our understanding that the versatility and use of securities, assume the virtue of providing marketing of goods and services as the holder of the credit, do not have to notify its transfer to the debtor. Deserves special attention as a title check value to ensure loans in special circumstances and that its use is common in local trade.
But what is a securities?, Under the law is a document that contains a wealth of private law intended to run in compliance with the formalities established by law. Is a necessary tool to enforce the law literally and self-contained in that document.
Another instrument used by banks and financial institutions is the Letter of Guarantee and Learsing or lease, the bank guarantee as a form of special credit, since the new law on banks and financial institutions considered as active and as the name assume the characteristics of credits. Similarly Invoice Factoring as compliance and new forms of financial instruments.
documents also have well-known in commercial practice such as invoices, receipts, and private contracts that are usually considered as debt instruments between traders and customers.
can not be denied the speed and volume of commercial transactions in modern times requires trade, makes every day are required legal instruments, mechanisms and appropriate markets for the movement of capital, able to provide legal certainty and effective and efficient delivery of care business.
Before describing the characteristics of each of the credit instruments, knowledge of the use thereof by the employer can be classified into short-term loans, medium and long term. This can be treated for giving credit to the funding it. However, in the trading system is not well known credits long term.
then analyze them either one by one:
13.1. POINT OF CHANGE
is a credit instrument that tests required by its mere existence, without being necessary to consider the causes that gave rise, considering this ground as a tool for abstract and autonomous.
addition, the bill of exchange has the characteristic of the payment order, and that through it a person who has a claim against another and that is not expired but will expire, may be financed through a bank or a future date assume that a third party debt in solidarity. Also, the bill of exchange is the title higher value employment in the business.
The letter serves to support trade credit purchase, or as collateral for short-term. Likewise, the letter can be endorsed because it is a paper currency and finance because it is accepted in the banking and financial system as a tool for collection.
The letters also can be backed up, secured and guaranteed. Are endorsed when its business and its acceptance are paid by individuals or corporations the same as by accepting, consisting this in the relevant securities. Is to strengthen when backed by a letter of solidarity bond, irrevocable, unconditional and immediate implementation, issued by a bank or financial. Is guaranteed when its release have specific additional safeguards.
bill of exchange, to be valid as such and in accordance with securities law can only be rotated:
- The View: Pay your own presentation.
- Ahead Views: When the deadline for payment starts to be calculated from acceptance. date
- Ahead: The paid on the appointed days counted from the date of issue.
- Fixed Ahead: We pay as directed according to the document.
Requirements
According to securities law Securities and bill of exchange must contain:
1. The term bill of exchange or other equivalent.
2. The unconditional order to pay a certain amount of money.
3. The name of the person in charge of turning point.
4. The expiration date.
5. The indication of place of payment.
6. The name of the person to whom payment must be made.
7. The indication of the date and place of issuance of the letter.
8. The name and signature of the person issuing the letter.
13.2. PAYING
a security is suitable for documenting credit direct cash obligations between a creditor and a debtor, the latter being where the note is in favor of the former. Unlike the bill of exchange that is a security causal order, ie in this document are agreed the conditions that give rise to the claim, including in it the collateral that secures the obligation, giving him an advantage over point as to minimize the risk of a credit covenant because this compelled to point out the cause and ensuring as optional.
The promissory note is almost always used to obtain bank credit for being a security point most complete, but commercial use is increasingly widespread and accepted. Hence the name of bank notes and commercial. In this lending is recognized that the interest payable will be the default interest and compensation. It should also take into account that the default interest, to be charged, must be compact, otherwise only be receivable compensatory interest or otherwise in legal interest.
The note has a term not less than 30 days nor more than 180, which can be either renewable.
Requirements
- The name of Pay or Pay to the Order of:
- The indication of the date and place of issue.
- The straightforward promise to pay a sum of money within a specified period or determinable in the case of legally admitted capital adjustment.
- The name of the person to whom payment must be made.
- The indication of the maturity and the place to be paid.
- The name and signature of the sender.
is a debt issuing general deposit warehouses. The deposit certificate evidencing ownership of the goods or items left in the store that issued the title.
The Warrant is a test title and the presence of a claim of lien on the goods or property as specified in the "Certificate of deposit" for. This Certificate is issued by the Warehouses that certifies the ownership of the goods and merchants deposited in the warehouse. Goods delivered to stores must be insured against fire or other disaster or emergency presented. The holder of the warrant certificate and may sell the goods, without having to physically deliver it to the buyer because it is enough to make delivery of the certificate and the respective Warrants.
is appropriate to note that by endorsing a warrant, the creditor has a preferential right over any other creditors that their loans will be paid, may in case of failure to make forced to auction the goods, rights not invalidate or even bankruptcy, disability or death of the obligor, and the Warrant is solid warranty.
You can also occur if the holder of the Warrants can certificaos and collateralized loan request with the documents that makes consideration of the entities that require these guarantees to give their credit.
This instrument is often used by industrial companies rather than by trade or service, because it has more advantage in obtaining loans using as collateral their finished products.
However, the wholesaler, you can also leave deposit their merchandise sales are seasonal and do not necessarily need them, but to a new sales campaign. Additionally, the title means Warrant, Certificate of deposit indicates the characteristics of the property deposited in the store, both can be endorsed or used as security documents.
Requirements
- Name and address of the depositor.
- Date of issue.
- Technical description of the quantity, weight and quality of the goods that are left on deposit.
- Warehouse Designation and seal and signature of the Administrator.
- Certificate Order Number
- Name of Bank or entity to whom the merchandise is entered.
- insurance amount, name and address of the insurer.
- Total payment for the storage, maintenance and operations related to the goods.
consider a direct short-term credit and its use is by credit card used as payment methods. The advantage of this type of loan is that it is versatile and practical for use. Its operation and moving it takes money to call it "plastic."
financial institutions make loans to managers or owners of the enterprises based on income amounts determined to be handled in savings accounts and / or checking accounts. Its use is oriented to obtain credit in the short term, especially for consumer goods and services.
Assuming a classification, we can say that in our environment are outstanding bank credit cards and business credit cards, although both are aimed at meeting the credit needs of the users we can say that there is marked difference between them. No credit cards or commercial bank lending is characterized by revolving, ie lines that are activated as the client is canceling their quotas. The amounts granted are variable and that these respond to customer qualification, availability and management of financial institutions.
We can affirm that the commercial credit cards are differences in the bank because they are less risky, for that reason the interest rates are lower.
Requirements
- Savings Account and / or current account.
- Enforceable requirements
- Application and Contract
- required by the Bank Guarantees
This is not a negotiable document under the terms of the security, but the right arising from the letter is assignable, as any economic right, after notification of the assignment to the debtor, or the issuing bank from paying.
the bank security is a secured document and is personally guaranteed by debtor and creditor with specific responsibility of the issuing bank, who will be required to answer for the debt if the debtor defaults.
is very common to use letters of guarantee and guarantees to third parties, is required use in bidding participation or support for the performance of work or business, there various uses, such as contract signing, advance bail guarantee of payment, etc.
letters are supportive bonds, irrevocable and automatically. Just a creditor of the client's delivery of a notarized notice to the bank, on behalf of this, have to pay.
This instrument is little known in the business but common to see its effectiveness in supporting trade credit obligations.
Requirements
- Date of issue.
- Name of the issuing bank.
- Name of the Beneficiary.
- Purpose and amount approved.
- Deadline for cancellation of credit.
- additional requirements.
constitutes a form of medium-term credit is allowed in the trade because is a contract for the lease object or location of movable and immovable property acquired by a third party lessor company for the use of the lessee. This Agreement transfers to the lessee contract transfers all benefits and risks inherent in the ownership rights to the leased asset. States that the financial operation is generally learsing made between legal persons and that tax has some benefits, not so for natural persons. By paying regular installments and an option for the lessee to buy the goods at a value agreed.
has to specify that the lessor is a company Financial, while the Tenant shall be a legal person. The main characteristic Learsing flexible in its structure of periodic payments that are perfectly suited to the needs of each user.
This feature adds three basic options that may be available to the lessee at the end of contract period: First, the tenant may choose to buy either a residual value. The second option is to extend or renew the contract and, as a third possibility the contract expires with no further obligation to lease can be a domestic or foreign.
should also be noted that this financing mechanism is based on two distinct features of the property subject to security: the ownership and use. Because the company buys the right to use an asset for a predetermined time without the need to commit to purchase. In this way the user company is in leasing and ownership entity, a landlord. The Learsing comes to a commercial contract, yet typical, reciprocal and expensive, have a continuous duration in time.
Elements Involved in the Learsing
- lessor Company or landlord.
- Lessee or tenant.
- Contract specification of goods.
- residual value.
This financial instrument credit allows a natural or legal person can access a credit line of medium and long term to finance acquisition of fixed assets.
here plays as a fundamental guarantee the mortgage. The contribution of the Bank or financial institution will be up to an amount of 75%, while the applicant provides the other 25%. The limit the credit is allocated according to the monthly capacity to present the credit applicant. An important feature is that the bill may be traded on the Stock Exchange. It is also important to note that these credits can be both legal persons in case of commercial enterprises, as dependent and independent individuals, provided they maintain a significant income and meets the requirements of the bank. A variant of this instrument is the negotiable mortgage title and becomes support for merchants who have property and wish to arrange bank loans.
Requirements
- the issuing bank.
- The letter mortgage.
- intermediary institution.
- Conditions required by law.
Factoring is one by which a financial institution known factor undertakes to buy (outright purchase) Current Assets such as the Bills, Notes, Invoices and credits (outstanding liabilities) whose ownership corresponds customers as a result of the operations of marketing goods or services made by these third parties, for a certain sum.
In simplest terms, is an operation or financial management technique by which an employer handles the exclusive claims against third parties that results in its business to a factor which may be a bank or financial , which is responsible for managing and accounting for such credits, which can assume the risk of insolvency of debtors of the receivables, as well as the mobilization of such by the advance of those in favor of his client. This operation involves both the customer and the billing company also called Factor. (Financial Company or the Bank that authorized by law).
If the company has working capital, but customers have asked for financial solvency and advance payments on account of orders, these documents may be established as instruments of collateral for credit in the banking system. This allows rapid attainment of short-term liquidity, the same can serve as backup for commercial operations by the company or client. Factoring in turn is divided into the following categories:
1. Factoring financing.
2. Factoring without funding.
Requirements
1. Factor
2. Factor.
3. Guarantee documents.
4. Contract.
13.9. COMPOSED BILL
This is also a credit financial instrument designated as negotiable instrument that has the same nature and characteristics very different from the Commercial Invoice. The only similarity we find is that the described property and credit sales transaction documents contain both belong to the same transaction. A of advantages over the bill of exchange or promissory note is that the bill is made up title causal value, because it provided evidence of the existence of a commercial transaction that creates or causes the issue, outlined in detail the subject of trade goods credit which represents partial or full payment, and constitutes acknowledgment of receipt of such property by the debtor, with the deferred payment agreement. It also represents the security right on the property described in the title.
For the retailer will have more confidence this new title-value because it is very easy to prove the cause of law and also to keep on goods sold on credit, preferred security interest that is not achieved by simply using the letter. In short, we can say that the factory made a negotiable instrument caused nominative and transferable by endorsement, also represents the right to claim arising in the commercial transaction that arises, and the preferential right of pledge on the goods described therein title, whose price has been deferred payment with a guarantee of their own property.
Requirements
1. Made up the name Bill.
2. Place and date of issue.
3. Name or corporate name of the seller.
4. Detailed description of the goods sold.
5. Unit prices and totals of the merchandise.
6. The amount paid by the buyer.
7. The expected date for payment.
8. The signature of both seller and buyer.
13.10. ORGANISE CREDIT
Within active operations of banks, credit syndication is a new form of syndicated loans that promote a number of national and foreign banks to a company that requires financial resources of great value, which is usually long term.
This appropriation is apportioned under the same terms and conditions for an individual credit agreement.
These loans are offered under a single interest rate and the same guarantee, the banks participating in the unionization are united in the performance and accountability.
The syndicated loan participants includes all types of institutions institutions, including international banks or banking agent being a leader who leads and coordinates the amounts, timing and facilities payments and the recipient of the funds until the maturity of the projects implementation.
syndication credits is under the new banking law and enter to work as a form of bank credit as of July 1992. Today many business enterprises in our country are asking syndicated loan from foreign bank branches, especially by low interest rates and extended financing terms.
While this credit mode is new, not others indicate that their knowledge in the commercial sector is required for credit transactions even within the country.
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