Loan lending – what exactly is that?
Anyone who deals with the topic of credit as a self-employed person will sooner or later encounter the concept of loan lending. But what exactly is meant by loan lending? The banking world understands by borrowing special loans, such as the guarantee credit, the letters of credit and the acceptance credits. In order to be able to take advantage of such loans, a bank must necessarily be turned on, which should be the house bank. Here is the entrepreneur known, because the credit rating plays a very important role in the loan.
The acceptance loan as a loan
Accepted loans are only granted to companies if the company has an excellent credit rating. The borrower undertakes in this loan to his credit institution by a bill of exchange. This means that the bank accepts a change of customer. In this change, the beneficiary must be a creditor, such as the customer’s supplier. The bank is liable in this type of loan for the redemption of the bill. The advantage for the customer: he has an easy-to-use means of payment through this loan.
The guarantee loan as a loan
The guarantee loan is a guarantee loan. In this case, the lending bank assumes a direct guaranty. The entrepreneur is the debtor in this case. He pays in exchange for the guarantee of the bank a so-called Avalprovision. The advantage for the customer: he does not have to leave any amounts with the bank, which negatively influences his liquidity.
The letter of credit as loan
Letter of credit is a bankruptcy, abstract and conditional promise of a bank to an exporter. Through this credit lending, the bank undertakes to make a payment upon presentation of a document in accordance with a credit document. This credit lending is only found in foreign trade. The advantage for the customer: the buyer has the certainty that he only has to pay if the goods are delivered properly. The seller can be sure that he really gets his money for the delivery of goods.
The loan is very complicated. However, it is basically a way to quickly get cash, without having to take long-term or expensive loans.