To maintain the competitiveness of the organization, long-term investments are needed. Additional resources can be attracted through overdraft, targeted loan or credit line. You will learn about the essence and conditions of this service from this article.
A credit line is the right granted to the organization to use the borrowed funds of the bank within the agreed period of time and in the prescribed amount. Specific conditions are specified in the contract. This service allows you to close financial gaps without withdrawing capital from circulation. The client can independently choose when and how much money to use for him.
Kinds
A non-revolving credit line is provided in tranches within a certain period and limit of funds. The borrower chooses when to use the money. Repayment of part of the debt does not increase the limit.
A revolving credit line is a loan that is provided in installments within the term specified in the contract. Timely repaid debt increases the limit of available funds. The client pays only for the actual amount of capital used.
In the first case, the borrower returns the loan body and interest to the bank, after which the line closes. And in the second - after the repayment of the first tranche, the limit of available funds increases, and you can use borrowed money again. There is only one limitation - the debt must be repaid within a certain period. Most often it is 3 months.
A non-revolving credit line with a disbursement limit is applied if the client needs borrowed funds for a certain period. But the exact start date for the expenses is not known.
A framework credit line is opened to pay for deliveries that are made at regular intervals, within a specified period of time.
There is a separate program under which a new tranche can be obtained only after full payment of the previous one within a specified period of time several times. It is called a revolutionary line of credit.
There are several more specific types:
- on-call (repayment of part of the funds allows you to get a future loan for this amount);
- contract account (credit is issued automatically after repayment of the previous one);
- multicurrency (short-term financing of foreign economic operations);
- upon request (a loan is issued upon request) and others.
Examples
- The borrowing company has a non-revolving credit line with the bank in the amount of 1 million rubles. Three tranches were taken: 500, 200 and 300 thousand rubles. After receiving the last part, a limit was reached. Now the client must repay the loan in full. He can no longer use the funds even with partial payment of debt.
- The credit limit of the organization is 1 million rubles. The borrower took the tranche - 700 thousand rubles. After this operation, the limit decreased to 300 thousand rubles. The following month, part of the debt was repaid - 500 thousand rubles. Now the amount of available funds is: 500 + 300 = 800 thousand rubles. That is, the client can withdraw funds several times and repay them in a timely manner. So that the amount does not exceed the one for which the credit line was granted. This is a revolving loan.
Sometimes the bank charges a fee for the unused portion of the funds. In the above example, this figure is 300 thousand rubles. Also, with a renewable scheme, the repayment period of each tranche is set. The contract can be drawn up for one year. But each individual part of the funds used must be repaid within 2-3 months.
- Under the terms of the revolver program, a limit of 1 million rubles has been set. for 1 year. The client can borrow funds within this amount an unlimited number of times within 12 months.
Difference of a credit line from a target loan
- Convenience and benefit for the enterprise. The date of the need for money is not known in advance. A credit line with a disbursement limit allows you to get a loan on time and repay when the opportunity arises.
- Attracting financing takes less time.
- Although this service is available in banks to almost all customers, the limits and terms of service depend on the size of the organization.
In some cases, a deposit will be required. This may be raw materials that the company acquires with borrowed funds, or other assets. If there is collateral, the rate is reduced, and the process of processing the transaction is accelerated. - You can get a targeted loan at Sberbank. Terms of use will be less beneficial to the borrower. Credit lines usually have a lower interest rate.
Features of the provision of services by Russian banks
A loan can be obtained in rubles, dollars or euros. The amount depends on the solvency of the legal entity, its credit history and account turnover. Dates vary from 3 months to 5 years. If a “long” credit line is opened with a debt limit of more than 1,000 thousand rubles, the bank may require adequate security: real estate, land, transport, equipment. The company can get a loan:
- at a fixed \ floating interest rate;
- % commission will be calculated separately for each tranche.
Bank remuneration is always set individually, depending on the amount, currency, terms, financial condition of the borrower, reputation of the organization and level of risk. Commission ranges from 10-20% per annum. Opening a credit line will cost the borrower 2% of the limit amount. A renewable scheme may include a monthly maintenance fee. Restrictions on the amount of one tranche may also be established.
Legal Advantages
- Save time: no need to complete each transaction separately.
- Interest is accrued only on the funds used.
- Repayment occurs automatically when transferring money from counterparties to the borrower's account.
- The interest rate for using the service is lower than for targeted loans.
- With the help of a loan, a client can increase working capital, cover unforeseen expenses or channel money for business development.
Credit at Sberbank: conditions for obtaining a service
The largest financial institution in the country provides a loan in the amount of up to 3 million rubles. at a rate of 19-19.5% without collateral and surety. A company can use these funds to replenish current assets or to develop a business. At the same time, the bank has the right to unilaterally freeze tranches in the event of the first financial difficulties.
The limit of funds for which a Sberbank credit line is provided depends on the specifics of the business, a specific project, the financial stability of the company, security, and business reputation of the organization. With a large loan amount you will need to arrange a pledge. It can be buildings, equipment, vehicles, stocks, securities. The size of the loan is 50-70% dependent on the value of the collateral. The application is considered for about a week. During this time, external and internal factors, collateral liquidity are evaluated. If the bank makes a positive decision, then you can immediately sign a credit line agreement. No additional time will be spent on re-evaluating assets.
Some statistics
The need for enterprises in "long" loans reaches 900 billion rubles. per year, but companies receive no more than 10% of this amount. The payback period of investments reaches 7-10 years. Sberbank is actively financing small businesses. About half of the organization's loan portfolio is long-term investments worth more than 600 billion rubles, which were provided by more than 1 million companies. A line of credit “Business” was developed for small businesses, within the framework of which it is possible to obtain borrowed funds for any purpose: from purchasing materials to fixed assets and financing loans at other institutions.
news
It becomes unprofitable for banks to provide credit lines to legal entities. This is evidenced by judicial practice with bankrupt clients. Such claims are treated in the same way as for ordinary loans. The amount of funds that the client must repay is calculated not from the loan limit, but from the gross amount of payments made. Bankers consider this product not as a one-off, but as renewable. As a result, expenses of credit organizations are increasing significantly.
Option for individuals
Russians can also issue a credit line, but this service is not provided by all banks and only on bail. As the latter, an open deposit is used. The goal is to finance a loan in another bank or obtain working capital for starting a business. Nevertheless, this service has advantages:
- the ability to use borrowed funds without breaking the deposit and interest on it;
- You can arrange the service for an emergency using an individual’s deposit as a security;
- a loan is provided in the form of opening an account with a bank;
- minimum package of documents;
- there are no expenses for registration of collateral;
- the interest rate is usually equal to that provided for the deposit taking into account a small margin;
- no monthly commissions;
- a credit line can be opened in dollars, euros or rubles;
- the maximum term is six months.
There is another example - a renewable credit card. Funds can be received at any time, and repay them with a delay. This also includes loans for education, housing, when the money comes in tranches, and you can save on interest.
Conclusion
A credit line is a new type of enterprise financing. Borrowed capital is given for a certain period. Funds can be used exactly when they are needed. Interest is accrued only on the amount used. In this case, the rate may be fixed, floating or individual for each tranche. The credit line of Sberbank, depending on the need for capital, can be provided without collateral and surety. It is served at a rate of 19.5% per annum.