In recent times, due to the economic crisis, companies have not had easy access to loans and credits by traditional financial institutions. However, there have always been legal figures and operations that have allowed organizations to obtain the necessary liquidity for their day today.
The Credit Assignment
The transfer of credit may be the closest thing to the endorsement of an exchange document. If we look at the balance sheets of most companies, surely in its active part we will see several credit rights of which the company is a creditor.
With these titles, the company can market.
That is, we are facing an operation in which there are two participants, the transferor, which would be the company that gives up its right to collect that credit, and the assignee who is the natural or legal person who buys that collection right.
The main difference with respect to any other similar operation is that in this case, both parties have no obligation to inform the debtor of the operation about the transfer of the right and, in addition, the transferor is not liable for the insolvency of the debtor at the time of payment.
Within the loan transfer, there are two formats
Credit transfer with or without recourse
The transfer of credit without recourse is that a company makes the sale of its credits to third parties regardless of the way in which they are documented (invoices, letters, receipts … etc). The peculiarity of being without recourse is that the transferor is not obliged to respond to the insolvency of the debtor in case of default.
Credit Assignment Agreement
The loan assignment contract is the official document in which the operation materialized by which the right to the collection between the assignor and the assignee is transferred.
The Credit Policy is a document that is usually formalized before a notary, whereby a traditional financial entity (bank), after a solvency and repayment capacity study, grants a company, dispose of a certain amount of money within order to provide enough liquidity for your daily activities.
The term of expiration of these policies is usually 12 months renewable annually. At the time of signature, all possible expenses, commissions, and interest rates to be applied will be agreed upon and reflected in the document. A credit policy allows income and refunds to be made on your associated account in order to replenish the balance used as income is received.
A line of credit is an operation that sets a certain amount of money available during an agreed maturity period whose mission is to finance the current assets of companies
Revolving credits are mosque refers to credit cards, for which purchases are made determined by different means, both face-to-face and online to be paid later in the short or medium term.
Credit without guarantee
The credit without collateral consists of an operation whereby the banking entity grants credit to the company without requiring guarantees through guarantors. This usually happens when the company is a regular customer of the entity and its financial and reimbursement behavior is more than reliable.
The credit account is that bank account in which the amount granted by the entity is materialized and deposited, which usually has a very similar operation to that of a checking account since it allows income, refunds, transfers … etc.
It is also very important to know how to differentiate between a credit account and a loan operation
Even today, some people confuse the terms credit and loan when in reality they are very different operations. In a loan operation, a specific interest rate and a repayment term of the amount are fixed through monthly, quarterly or annual installments. A period of expiration time is also set. It is a fixed account that is usually associated with a checking or savings account in which the charges corresponding to the installments and also early repayments will be made if the loan policy allows it.
The objective of a loan is usually the purchase of a material asset while that of a credit account is to guarantee the proper functioning of the currency of any company.