Term loan for working capital financing
The loan is for financing specific types of a client’s operating assets. It can be provided in CZK or a foreign currency.
- Bridging a client’s temporarily increased need for funds without negative consequences in terms of an increase in overdue payables to suppliers. For example if
- Growth in the need for a company’s operating assets that is fast and secured by orders could not yet be ensured using own funds or trade liabilities.
- Orders that are significant in terms of value require stocking up (raw materials, goods…), project preparation, etc. and the subsequent sale will take place after a period of time.
- It concerns seasonal production or sales, or a fluctuation due to a holiday by all workers at a company.
An term (instalments) loan can also help cover fluctuations in a company’s financial management.
Drawing and repayment
Drawing is usually as a one-off, repayment is possible as a one-off or gradually in accordance with a schedule.
One of the conditions for drawing a loan is documenting the existence of the financed operating assets or liabilities.
Collateral is usually in the form of pledging trade receivables of the client that are acceptable to the bank or a security transfer of ownership rights to the client’s movables.