A budget loan is nothing more than a form of financing costs related to budget, which involves the provision of certain funds to legal entities. Also, this type of loan can be provided on a reimbursable or repayable basis to another budget. All the main provisions are set out in the budget code.
A budget loan can be provided to a variety of legal entities. Note that it does not have to be a municipal unitary or state. In such cases, a special contract is concluded, which is based on the norms of civil law. The borrower gives an obligation to repay the loan within the specified period.
Bank guarantees in this case are not the only ways to ensure fulfillment of obligations to return funds received from the budget. These methods also include the pledge of property, surety. Mortgaged can be not only property, but also stocks, shares and so on. The degree of liquidity to ensure the fulfillment of obligations must be sufficiently high.
Budget loans have many mandatory conditions for obtaining. These include an early audit of the financial condition of an enterprise that wishes to become a recipient of such. The revealed inability to ensure the fulfillment of obligations leads to a refusal to receive these funds.
Municipal unitary as well as state organizations can get a budget loan much easier. The conditions for obtaining are prescribed in civil law, and the limits are provided for by the budget from which they wish to obtain a loan. All reports and additional information that is somehow related to the use of the loan received must be reported to the authorized body.
The subjects of the Russian Federation can receive a certain amount from the federal budget for more than a year. The amount itself should be spelled out in the law on the federal budget. A loan is issued at a fixed percentage.
Local budgets have the opportunity to get a loan from the budget of the subject. The term will also be more than one year.
As mentioned above, in order to get a budget loan, it is necessary to clearly and accurately present the goals for which the received funds will be used. In the future, the borrower can wait for verification of the appropriate use of funds at any time.
Funds in some cases have to be returned. We are talking about those specific situations where it was possible to prove that the borrower spends money not to achieve predetermined goals, spends it rashly or cannot provide any additional guarantees of fulfillment of obligations.
In some cases, the borrower or his guarantors are not able to pay off the budget loan. In this situation, the authorized bodies make attempts to forcibly recover from the borrower, his guarantor or guarantor all necessary. For late payment, additional interest may be assigned. Extending the term of a budget loan is practically not practiced; it is extremely difficult to achieve it.
A budget loan will be recognized as fully paid only from the moment the last installment is credited to the CBR. From that moment, all credit obligations will be considered fulfilled. If all payments were timely, over time, the borrower will be able to borrow from the budget again.
A budget loan is good because it involves large loan amounts. It is difficult to issue it, but if you wish, you can spend time and go through all the necessary checks.