Foreign economic activity. Payment return methods for a commercial loan (the most important)

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Foreign economic activity. Payment return methods for a commercial loan (the most important)

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79. Methods of repayment for a commercial loan

International practice has developed standard forms and methods for the return of payment when lending to foreign trade transactions.

The main ways to secure payment on commercial loans:

▪ urgent and accepted drafts;

▪ documentary letters of credit;

▪ bank guarantees.

Most often, when lending to foreign trade transactions, a bill of exchange form is used.

A bill of exchange is a written promissory note of the established form, which gives its owner (bill holder) the right to demand from the person who signed this obligation (bill drawer) the payment of the specified amount by a specific date. A bill of exchange refers to securities, and is most often used as a means of payment for long-term loans. When a bill of exchange is transferred by its owner in favor of another person, a special endorsement is made on the reverse side - an endorsement.

In foreign trade settlements, two forms of a bill are used:

▪ promissory note - a debt obligation of the drawer to pay the amount specified in the bill to another person - the holder of the bill

▪ bill of exchange (urgent bill of exchange) - an unconditional offer of the drawer, addressed to the debtor (drawee) to pay at the appointed time to a third party - the recipient (recipient of funds under a bill of exchange) - the stipulated amount.

Acceptance - consent of the drawee to make payment to the drawee. The drawer has the right to confirm the payment of only part of the amount, i.e. make a partial acceptance.

Terms of acceptance of bills of exchange by the importer are stipulated in contracts along with sanctions in case of their violation, including the suspension of further deliveries.

Negotiation of bills of exchange - purchase of bills of exchange, i.e. the desire of the exporter to quickly turn over his capital.

A documentary letter of credit opened by the importer's bank for the full amount of the value of the goods sold on credit terms is the most advantageous form of securing the return of payment on commercial loans for the exporter. Such letters of credit contain the obligation of the bank to make payment when due, to accept the draft and pay for it, and to negotiate the draft issued by the exporter to the importer.

Providing guarantees for a commercial loan is one of the conditions for credit operations in foreign trade transactions.

Forms of guarantees: guarantees of correspondent banks, bank avals, banker's acceptances, guarantees.

Bank guarantee - the obligation to make payment upon the occurrence of the guarantee conditions fixed in the letter of guarantee. Bank payment can be both unconditional (payment on demand) and conditional (depending on any circumstances) character.

Bill of exchange (guarantee) on responsibility to the owner of the bill for the fulfillment of the conditions assumed (aval) of the bank is a fairly accessible form of guarantee of credit payments.

Bank aval issued for each of the bills separately. Only bills of exchange payable after a certain period of time, but not intended for payment on demand, can be avalized. The correctness of making aval, acceptance in foreign trade transactions, the nature and scope of responsibility of the avalist is determined by the law of the aval country.

banker's acceptance - consent to payment or its guarantee from first-class banks.

Regular letter of credit - the obligation of the issuing bank, giving the beneficiary (recipient) a guarantee to make payment within the specified amounts if the importer fails to fulfill its obligations under the main contract against the provision of documents by the recipient.

Down payments and company guarantees give the exporter the opportunity to recover the losses, and return the balance to the buyer.

Company guarantees are issued by large companies for the obligations of buyers.

Author: Bobkova O.V.

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