Loan: features. How to have immediate liquidity
Loaning receivables is a practice which consists in transforming receivables with future maturity into immediate liquidity .
Anyone who intends to dispose of the receivables will have a number of methods available : the bill discount, the advance payment on bills and electronic bills , the advance invoices and factoring.
The bill of exchange discount is one of the methods of disinvestment of the most used credits and it is had when a bank or a financial company acquires a credit from a company to its nominal value and they assume then the risk to recover it.
When we talk about advance sums on bills and electronic orders we refer to the possibility of granting liquidity for the period between the sale and collectio .
The advance invoices, on the other hand, occur when a bank or a financial company provides liquidity to a company relative to a sales invoice issued for the period between the date of issue and collection.
Factoring, on the other hand, occurs when a company assigns a block of credits to a bank for consideration. The bank will then have to manage and recover the credits and provide support to the company from a fiscal point of view.
Loaning credits is therefore an operation with which a company can sell loans to banks and credit institutions. From a theoretical point of view, all receivables paid to customers, receivables that come from deferred payments agreed and / or contracted and receivables in the portfolio already expired can be subject to credit disbursement.
The disposal of trade receivables can therefore be both an advance on a portfolio and a mere advance on invoices. Generally, banks and credit institutions offer these possibilities together with a credit line, so as to make transactions more fluid. The credit, for example, allows you to provide liquidity against the transfer of credit or advance on invoices and to pay lower charges compared to the classic credit lines.
Taking a concrete example of disinvesting credits, consider the advance bills of exchange . In this case, customers can present their bills of exchange to the bank to receive liquidity thanks to the acceptance of bills and the management of the collection. The banks may from time to time evaluate the applicable rate and terms based solely on the customer’s merit.
The discount is part of the so-called discount transactions on portfolios together with all those receivable disinvestment operations concerning the anticipation of a certain credit. In all these eventualities, companies will therefore be able to obtain liquidity and thus maintain an active cash.