It is a contract by which the bank credits the net proceeds obtained from the “discount” of a promissory note issued directly by the customer in favor of the financing bank (direct promissory note). The operation does not offer any guarantee to the bank; the only advantage derives from the fact of having a security on which to carry out a compulsory execution process for the recovery of the credit , should the security not be honored at maturity Payday Loans Online In Fresno – fastloanca.

Self-liquidating operations

The bank discount

It is the contract under which the bank , after deducting the interest, advances to the customer the amount of a receivable from third parties that has not yet expired , by means of the transfer subject to collection of the credit itself.

1. The sale takes place with recourse, It may concern bills of exchange, pledge notes, BOTs, etc.
2. It assumes the existence of a previous credit facility. The bank also examines the creditworthiness of the promissory notes.
3. The bank discount can take place:
4. Through the use of a small castle . The bank sets the maximum amount of the presentable bills (lump sum), which coincides with the credit granted.
5. The castle has a revolving character , so the original availability is replenished every time the discounted effects expire and are regularly paid.
6. Discount in isolated form . The operation takes on an occasional nature, i.e. the contractor already has a discount castle, but it is assumed that he has fully used it.

The advance on the portfolio subject to collection

It consists of crediting the current account, or a temporary account in the name of the customer, of an amount equal to the nominal value of the trade receivables presented for collection, with a value after the expiry date of the same. To forward or postpone a currency means to change the date on which the interest is paid: if postponed it is postponed by a few days.

The entrusted customer has the possibility of immediately using the sums made available even if, by doing this, a ” currency overdraft ” is determined which gives rise to interest expense and other charges that accrue on the current account connected to the transaction.

The advance on the portfolio subject to collection presents risks higher than the bank discount, due to the absence of bills of exchange with the enforceability requirement.