The direct loan with guaranteed advances is a loan agreement that is disbursed against the sale of goods or securities as a pledge given as a guarantee. The customer remains the owner of the assets but cannot dispose of them until the debt is extinguished.
In case of non-repayment of the debt, the bank will auction the assets to recover the amount owed. Technically, the direct loan with guaranteed advances is of two types: current account advance and overdraft.
With the advance on the current account, the bank deposits on the customer’s current account an amount equal to the value of the assets pledged, less the so-called ‘haircut’ which expresses, as a percentage, the devaluation of the assets pledged.
The overdraft is instead short term loans granted by banks to meet temporary liquidity needs. The customer can dispose of small sums exceeding the actual availability on his current account against the financial resources he must have , and which he undertakes to pay into the account as soon as they are available.
Direct loan with exchange subsidy
The direct loan with a promissory note provides that the bank grants the best short term loans against the release by the customer of a promissory note to pay in his favor. The amount of the bill represents the nominal amount of the loan, while the financed amount (net income) is equal to the nominal amount minus interest, commissions and any stamps or taxes.
The amount disbursed can be used in whole or in part as needed and interest is paid on the sums used. Once the amount used has been returned, the entire credit line can be used again.