Supplier credit: practical pre-financing of your orders

credit loans

Numerous companies in Switzerland are faced with the same problem: on the one hand, it is necessary to pay their suppliers quickly, but on the other, customers pay for 30, 60 or 90 days. This causes a strong imbalance between collections and expenses. To deal with this problem, supplier credit is a modern and practical financing technique.

 

Finance your orders with supplier credit

Finance your orders with supplier credit

How does a supplier credit work? Your company buys goods from a business partner. Normally you have to pay the invoice of the latter according to the deadlines. The supplier credit is to finance your orders through a financial partner: the factor . The factor pays the invoices of your suppliers in your place within 24 hours, provided that you repay the amounts lent to him in a generous period of time. This system has several advantages:

  • Your suppliers are guaranteed to get paid. This offers you a better basis for negotiating discounts and lower purchase prices.
  • Benefit from payment terms that go up to 120 days for repayment to the factor, allowing you greater financial leeway.
  • You can place orders at any time, even if the liquidity needed to place orders is not currently available.
  • Your company’s liquidity increases because the outgoing cash flow is slower = positive cash flow.
  • A supplier credit is therefore doubly useful: your cash flow improves because you do not have to pay your order immediately and at the same time you benefit from discounts and reductions from your suppliers.

For more information, Prestafix offers a page dedicated to supplier credit / reverse factoring and the possibility of a free consultation by a specialist!

 

What is factoring?

supplier credit

The term “supplier credit” is a simplified term for the financial principle of reverse factoring. Factoring is a financial concept that is still little known on the Swiss market, but is rapidly expanding. With “classic” factoring, it is the credits deriving from the sale that are financed by the factor. In other words, the so-called “classic” factoring allows immediate collection without waiting for the customer to pay. There are different types of factoring, let’s see which:

  • Classic factoring : pre-financing of sales invoices. The seller is paid by the factor, which in turn is paid by the customer. It is a uniquely B2B solution.
  • B2C factoring : works in the same way as the classic variant, but can be used to pre-finance the invoices of private customers. (B2C = business to customer).
  • Supplier credit or renverse factoring : the renverse principle, according to which it is not customer loans that are pre-financed, but supplier invoices.

Within the factoring family there are already several special products that meet different needs. We recommend that you contact a factoring specialist to find out more about the nuances of factoring.

 

The advantages of factoring, an example:

credit loan

Do you manage a commercial company that sells products delivered mainly to companies (B2B) and, in smaller quantities, to private individuals (B2C)? As distributors, you are always dependent on the shipments of your business partners, which you must pay as quickly as possible. Opt for classic factoring for B2B, B2C customers and supplier credit. Your company takes advantage of your decision in several ways:

  • With supplier credit, your orders are paid in 24 hours . Take advantage of a 120-day payment term from most factors.
  • You will receive the proceeds of the sale within 24-48 hours. This will greatly speed up your income.
  • The result is faster cash flow , more liquidity and more flexibility for your financial planning.

 

The advice of a specialist

credit loans

Factoring solutions such as supplier credit are highly specialized financial products that can be individually adapted to your company. For this reason, a complete consultation and a precise analysis of the company are necessary before concluding any contract. It is advisable to consult a specialist who can perform these analyzes professionally. For example, Prestafix Services offers factoring solutions with the analysis of the corresponding file so that you can receive a product suitable for your needs. In any case, it is recommended to contact an expert before signing the contract.

All types of loan with guarantee

home loan

What is the collateralized loan? What guarantees will be requested at the time of the request? How much do they cost? How can you best manage this type of financing?

In this article updated to 2019 we will answer all these questions!

 

Loan with paycheck guarantee

Loan with paycheck guarantee

Obviously, since your task after the loan is to repay the monthly installments on time, the first and main guarantee that you will be asked for will be the testimony of your regular income. And that is:

  • The paycheck if you are an employee
  • Your last tax return if you are self-employed
  • The pension if you are a pensioner

However, there are ancillary guarantees, but these that we have just listed are the fundamental guarantees, as they are based on your creditworthiness, that is, on your availability of regular monthly income, which will allow you to pay the installments.

The ancillary guarantees that we will see are very useful to “convince” the bank that you will be a good payer, and therefore speed up the process of approval and disbursement of the loan itself.

In short, paychecks or pensions are the most important guarantees.

With just the paycheck or pension, you can apply for a loan with the assignment of the fifth, which is the easiest form of financing to obtain if you meet certain conditions.

 

Loan with assignment of the fifth

credit loan

It is a form of financing that is becoming increasingly common in Italy: it is the so-called transfer of the fifth.

We talked about it in depth in several articles.

The concept is very simple. If you are an employee or a pensioner, all you need to do is guarantee your paycheck or your pension certificate to secure a fifth of your net salary (or pension), which will be directly withheld and used to repay the installments of the loan.

The advantages of the loan with assignment of the fifth are many and attractive:

  • These loans are very quick to obtain (the procedures are computerized and there is no longer any need to contact the employer or INPS directly)
  • The conditions are generally good
  • The refund takes place automatically
  • With the renewal of the fifth, you can renegotiate your assignment to obtain more advantageous conditions over time compared to when you entered into the first loan contract.

On the other hand, the loan with assignment of the fifth has costs. In addition to the normal bank management costs, in fact, you will be asked to take out insurance policies (one on life and one on loss of employment) for the duration of the repayment.

However, don’t worry: in case of renewal or renegotiation, these costs can be refunded to you.

 

Alternative guarantees for loans

Alternative guarantees for loans

It is possible to obtain a loan with alternative guarantees.

In case you do not have a paycheck or a pension, but obviously you find yourself having to testify that you will be a good payer, able to observe the monthly payments foreseen by your financing, you can use alternative guarantees to obtain the loan.

These are therefore guarantees that replace or supplement the income.

 

Loan with guarantor guarantee

Loan with guarantor guarantee

If you have a low credit rating, the bank will surely ask you to find a person who guarantees for you: a guarantor, namely the guarantor. Whether you are a parent, a friend or an acquaintance, they will become responsible for paying the debt if you are unable, for any reason, to pay the installments correctly.

As is evident, the guarantor must be a person recognized positively by the bank, that is, with the financial possibilities to intervene in the payment.

The guarantee with guarantor has no additional costs, while for the guarantor there is only the moral and financial commitment.

 

Loan with securities guarantee

Loan with securities guarantee

A not very common situation is that of the debtor who does not have a job, but is in possession of a securities deposit containing shares, bonds, mutual funds or other financial instruments.

In this case, the bank could grant the loan in exchange for the guarantee of the securities deposit.

A sufficient part would be guaranteed to cover the loan granted in whole or in part.

The loan with securities guarantee also has no additional costs, but you must remember that the financial instruments that you will guarantee will not be available until the loan is extinguished, or until the bank allows you to use it.

 

Loan with guarantee of a property

home loan

It’s the mortgage. It represents a form of “real” guarantee, as you must have the availability of a property to be mortgaged. Loan with collateral for a property is a practice generally reserved for loans with large amounts. It has variable costs, which depend on the fee of the notary who will deal with contracts and documentation.

Banks appreciate this type of guarantee, first of all because they are “strong” guarantees, and secondly because their value increases if they are of the first degree (ie if there are no other creditors to claim mortgage rights on the property)

There are three types of home mortgage loan :

  • Mortgage loan : you take out a mortgage on the house as a guarantee, and the repayment ranges from 5 to 25 years
  • Home mortgage : also granted to bad payers, it allows you to customize the payment in installments
  • Mortgage liquidity : provides for a maximum capital equal to the value of the mortgaged property, and allows the provision of loans up to $ 75,000

The mortgage loan is suitable for those who need a medium-sized credit, given that the value of the property must be equal to or greater than the amount requested, and therefore in general those who own a property almost always meet this condition.

 

Loan with youth guarantee

Loan with youth guarantee

If you are young and you need liquidity – to study, or to open your own business – you can think of applying for a loan.

Don’t have a paycheck?

It may not be a problem, as there is a possibility that your bank will participate in one of the national, regional or municipal initiatives to provide honor loans.

Here it is not creditworthiness that is the needle of the balance, but a kind of “moral” and “economic” credit.

On a practical level, in these cases it is the State, the Regions or the Municipalities which guarantee the debtor.

By applying for a loan with a youth guarantee, you can have the liquidity you need now, but can easily return it over time.

 

Loans with guarantee bills

money loan

Changed loans are also part of loans with alternative collateral.

Loans with bills of exchange are granted in exchange for the subscription of bills of exchange, debt securities to order and immediately executive. For the bank or finance company, these securities are “stronger” than the normal debit on the current account of the repayments of the monthly installments.

The repayment of the monthly installment in fact takes place through the payment of the relative bill.

 

What happens if you don’t pay the loan bill?

What happens if you don

If you do not pay the bills of exchange, the bank will be able to take recourse directly to you, without going through judicial dies.

Loans exchanged are more expensive than other forms of financing, but they can also be requested if you have had some problems with the repayment of previous loans, or if you have suffered protests and your situation in Centrale Rischi is not exactly idyllic.

What happens if you don’t pay a loan?

money loan

Funding is often used to buy a car or to face unexpected expenses. However, it may happen that we find ourselves in a moment of economic difficulty and we are unable to pay the monthly installments agreed with the financial institution to which we have turned. What are the consequences in these cases? What happens if you don’t pay a loan? Let’s try to understand it together in this article.

What happens if you don’t pay a loan? What do you risk?

What happens if you don

If for a variety of reasons you find yourself unable to pay the loan installments, you will first receive several payment reminders from the financial institution. In these cases it is always advisable to contact the credit institution and agree on a repayment plan together, perhaps by reviewing the plan itself, extending its duration and redefining the most comfortable installments to pay .

If, however, the reminders will not be considered, unfortunately, the financial institution will be forced to report the person in the various databases, such as the Crif, as a bad payer . ” Crif “, like other institutions that manage financial databases, is a company that collects and profiles all information on requests for loans, obtained and rejected by various credit institutions throughout Italy. To find out more, just read the following article.

What happens to those who have been negatively reported to a creditworthiness database

money loan

That is if they have delays or if they do not pay the installments of a loan? In this case, if there is a need to obtain additional liquidity in the future, the Banks are not willing to grant it with personal financing. The only form of loan that you can access, always evaluating the creditworthiness of the applicant and safeguarding the overall debt is the transfer of the fifth .

It must also be said that, in addition to the above, the delay or non-payment, even of just one installment, of a loan entails the addition of default interest to the entire sum disbursed . If, on the other hand, it is no longer possible to repay the sum received on loan, there is also the risk of a legal action by the credit institution which can go as far as a foreclosure procedure against the holder of the loan.

What happens if you don’t pay a loan? The assignment of the fifth can be the solution

What happens if you don

As mentioned above, if you are in difficulty to pay off a loan, you can access the loan with the assignment of the fifth and consolidate the current loan (s) that you are unable to pay obtaining a double benefit. The first is to lower the total monthly installment to be paid due to the fact that the payment can be deferred up to 10 years, while the second is that the transfer of the fifth allows you to have very high amounts paid and in this way allows you to consolidate many small ones. loans often with high interest. You can calculate a quote directly on our website.

Loan request: how much are Italian families asking?

money loan

10 years have passed since the 2007 crisis and the Italian market is slowly recovering. A further boost impressed on the eurozone countries was that given by the monetary policy implemented by Marino Braghi, President of the Equitablewise Bank. Thanks to the introduction of the so-called “QE”, quantitative easing, ie liquidity in the markets, the interest rates of the banks have fallen and are practically close to zero. What does it mean in plain English? What is the goal of this maneuver? Seek to restart the market, indirectly pushing consumers to apply for and support loans or mortgages more easily. After ten years, how is the situation regarding the 2017 loan application? Let’s see together how much money Italian families need and what it is used for.

 

Rising or falling trend?

loan request

According to data published by “CRIF”, the credit information system, an international database, seems that the loan request 2017, already in the first quarter, increased by 2% compared to last year. The average amount requested by Italian families is $ 9,325, but this figure is also growing: the demand for amounts between $ 20 and $ 35 thousand increased by 1.1% and the duration of the loan exceeding five years is grew by 2.1%.

 

how do Italians use loans?

use loans

Having ascertained the objective increase in the 2017 loan request, how do Italian families spend the liquidity obtained? As is easily understood, the central focus is on the purchase of cars, but in net recovery, with a + 4.1% compared to last year, there is the purchase of “technological equipment”: from smartphones, to pc, tablet and latest generation televisions.

 

Changes in the 2017 loan application 

loan application

The financial sector is subject to constant changes due to changes in legislative regulations. In fact, in the latest protocol published by “Assofund”, the association of the main operators, banking and financial operators of consumer credit and real estate, under the directives of the ProcessPlus Bank, the need was urged for banks and financial doing new business, thus discouraging the so-called “renewals” on the existing customer portfolio. Considering that: 94% of those applying for funding have already applied for it in the past, who is made up of 6% of those who are applying for credit for the first time?

 

The profile of those applying for credit in Italy

The profile of those applying for credit in Italy

The largest slice that “markets” in the credit sector is made up of people who request loans or loans countless times. The average user profile has a natural tendency to over-indebtedness and a low conception of risk. The average age is between 36 and 57 years old.

The opposite considerations are instead for the “New2credit” users. Their profile is in fact smarter, more skilful, they pay greater attention to borrowing and in fact to confirm this, the request for average funding is short-lived, around 4-5 years. The average age of this segment is much lower with the prevalence of the famous “millennials” between 18 and 35 years old.