What are some key funding facility terms and what do they mean?

Financial facility terminology can be complex and difficult to understand, which is why we have explained some of our main facilities in more simple terms below:

Collateral Transfer

Collateral Transfer is the transfer of assets from one party to another, which is frequently accomplished through the use of a Bank Guarantee. The Provider agrees to issue the Bank Guarantee to the beneficiary in exchange for a rental or return, known as a Contract Fee. Continue reading…

Bank Guarantee

A bank guarantee is a type of financial protection provided by a lending institution. The bank guarantee means that the lender will ensure that a debtor’s liabilities are met. In other words, if a debtor does not pay his or her debt, the bank will cover it. A bank guarantee allows the customer (or debtor) to purchase goods, purchase equipment, or obtain a loan. Continue reading…

Bank Guarantee Examples

• A payment guarantee ensures a seller that the purchase price will be paid on a specific date.
• An advance payment guarantee serves as collateral for reimbursing the buyer’s advance payment if the seller fails to supply the specified goods per the contract.
• A credit security bond serves as collateral for loan repayment.
• A rental guarantee serves as collateral for rent payments under a rental agreement.
• A confirmed payment order is an irrevocable obligation in which the bank pays the beneficiary a predetermined amount on the client’s behalf on a specific date.
• A performance bond serves as collateral for the buyer’s costs if services or goods are not delivered on time.

What is a Line of Credit?

A line of credit (LOC) is a predetermined borrowing limit that can be accessed at any time. If a borrower has an open line of credit, he or she can borrow money whenever necessary until the limit has been reached, as the money is repaid, it can be borrowed again.

LOCs are agreements between financial institutions — usually banks — and customers which stipulate the maximum amount of loans the customer can take out. If the borrower does not exceed the maximum amount (or credit limit) set in the agreement, they can access funds from the line of credit at any time. Continue reading…

What is a Raised Line of Credit?

Under the Collateral Transfer facility, bank guarantees can be used by the recipient to obtain lines of credit from a bank. Normally, a bank will not object to offering credit against a Bank Guarantee obtained in this way. An amount as high as 100% of the face value may be lent, less the advance on interest and bank fees. It is presumed, however, that lending rates range from 70-80% of face value. Continue reading…

How can IntaCapital Swiss SA assist?

At IntaCapital Swiss, we facilitate funding for many projects across the globe. With our expert team of financiers, we can offer new projects immediate working capital, subject to passing our due diligence, whether they fall under commercial, residential, infrastructure or leisure.

Find out more about how IntaCapital Swiss SA can facilitate multiple different facilities via our website: https://intacapitalswiss.com/news/construction/construction-funding-via-collateral-transfer/