A bank loan is one of the most common forms of credit relations in the economy, the object of which is the process of transferring funds to a loan on terms of urgency, repayment, and payment.
A bank loan expresses economic relations between lenders (banks) and lending entities (borrowers), which can be both legal entities and individuals. Legal entities of other states - non-residents of the Republic of Kazakhstan use the same rules with regard to credit and bear the same duties and responsibilities as legal entities of the Republic of Kazakhstan, unless otherwise provided by law.
The bank form of credit is the most common form, since it is banks that most often provide loans to entities in need of temporary financial assistance.
A bank loan is provided exclusively by financial institutions licensed to carry out such operations.
The main principles of lending, including banking, which must be observed in the process of issuing and repaying loans, are:
1) the urgency of the return;
2) security;
3) target character;
4) payment.
The urgency of the return implies the return of the issued loan in the established volumes and within the specified period.
The security of the loan links its issuance and repayment with material processes that guarantee the return of the funds provided. Collateral must be liquid and complete. Even when a bank provides a loan on trust (blank loan), it must have absolute confidence that the loan will be repaid in a timely manner. Unsecured loans can be provided in large amounts only to large enterprises, i.e. first-class borrowers with qualified management and an excellent history of development.
The target nature of the loan provides for the issuance and repayment of the loan in accordance with the goals stated at the conclusion of the loan transaction, for example, a loan to replenish the fixed capital.
The payment of the loan determines the payment for its use, in particular in the form of loan interest.
Lending conditions are understood as the requirements that apply to certain (basic) elements of lending: subjects, objects and loan collateral. In other words, the bank cannot lend to any client and that the object of lending can only be the need of the borrower, which is associated with his temporary payment difficulties, with the need to develop production and circulation of the product.
The terms of the loan are as follows:
1) the coincidence of interests of both parties to the credit transaction;
2) the availability, both of the creditor bank and the borrower, of the ability to fulfill their obligations;
3) the possibility of realizing the pledge and the availability of guarantees;
4) ensuring the commercial interests of the bank;
5) conclusion of a loan agreement.
A bank loan is classified according to a number of criteria:
1) By maturity:
Short-term loans are provided to fill the temporary shortage of the borrower's own working capital. Up to a year. The interest rate on these loans is inversely proportional to the maturity of the loan. Short-term credit serves the sphere of circulation. The most actively used short-term loans in the stock market, trade and services, in the mode of interbank lending.
Medium-term loans are provided for a period of one to three years for production and commercial purposes. The most widespread in the agricultural sector, as well as in lending to innovative processes with an average amount of required investment.
Long-term loans are used for investment purposes. They serve the movement of fixed assets, differing in large volumes of transferred credit resources. They are used for crediting reconstruction, technical re-equipment, new construction at enterprises of all spheres of activity. Long-term loans received special development in capital construction, the fuel and energy complex. The average repayment period is 3 to 5 years.
On-call loans , payable within a fixed period after receiving official notice from the lender (the repayment period was not initially specified). Currently, they are practically not used not only in Kazakhstan, but also in most other countries, as they require relatively stable conditions in the loan capital market and in the economy as a whole.
2) By means of repayment:
Loans repaid in a lump sum by the borrower. This traditional form of repayment of short-term loans is optimal, because. does not require the use of a differentiated interest mechanism.
Loans repaid in installments over the entire term of the loan agreement. Specific conditions for the return are determined by the contract. Always used for long-term loans.
3) According to the methods of collecting loan interest:
Loans, the interest on which is paid at the time of its total repayment. The traditional form of payment for short-term loans for a market economy, which has the most functional character from the standpoint of ease of calculation.
Loans, the interest on which is paid in equal installments by the borrower during the entire term of the loan agreement. The traditional form of payment for medium and long-term loans, which is quite differentiated depending on the agreement of the parties (for example, for long-term loans, interest payments can begin both at the end of the first year of using the loan, and after a longer period).
Loans, the interest on which is withheld by the bank at the time of the direct issuance of the loan to the borrower. For a developed market economy, this form is absolutely uncharacteristic and is used only by usurious capital.
4) According to the methods of granting a loan:
Compensatory loans directed to the current account of the borrower to compensate the latter for his own expenses, including those of an advance nature.
Paid loans. In this case, loans are received directly to pay for settlement and monetary documents presented to the borrower for repayment.
5) By lending methods:
One-time loans provided on time and for the amount stipulated in the agreement concluded by the parties.
A credit line is a legal obligation of the bank to the borrower to provide him with loans within a certain period of time within the agreed limit.
Credit lines are:
Revolving - this is a firm obligation of the bank to issue a loan to a client who is experiencing a temporary shortage of working capital. The borrower, having repaid part of the loan, can expect to receive a new loan within the established limit and the term of the agreement.
A seasonal credit line is provided by a bank if the company periodically has working capital needs related to seasonal cyclicality or the need to create stocks in the warehouse.
Overdraft - this is a short-term loan, which is provided by debiting funds from the client's account in excess of the balance on the account. As a result, a debit balance is formed on the client's account. An overdraft is a negative balance on a client's current account. An overdraft may be permitted, i.e. previously agreed with the bank and unauthorized, when the client issues a check or payment document without having the bank's permission to do so. Overdraft interest is calculated daily on the outstanding balance, and the client pays only for the amounts actually used by him.
6) By types of interest rates:
Loans with a fixed interest rate, which is set for the entire period of the loan and is not subject to revision. In this case, the borrower assumes the obligation to pay interest at a constant agreed rate for using the loan, regardless of changes in the market conditions for interest rates. Fixed interest rates apply for short-term loans.
Loans with a floating interest rate. Floating rates are called such rates, which are constantly changing depending on the situation in the credit and financial markets.
Loans with a stepped interest rate. These interest rates are reviewed periodically. Used during periods of high inflation.
7) By the number of credits:
Loans provided by one bank.
Syndicated loans provided by two or more lenders, united in a syndicate, to one borrower.
Parallel loans, in this case, each bank negotiates with the client separately, and then, after agreeing with the borrower on the terms of the transaction, a general agreement is concluded.
8) By availability of collateral:
Trust loans, the only form of security for the return of which is a loan agreement. This type of loan does not have specific collateral and therefore is provided, as a rule, to first-class creditworthiness customers with whom the bank has long-term ties and has no claims on previously issued loans.
Contract credit. A checking loan is issued using a checking account, which is opened to customers with whom the bank has a long-term relationship of trust, companies with an exceptionally high credit reputation.
Pledge agreement. Pledge of property (movable and immovable) means that the creditor-mortgagee has the right to sell this property if the obligation secured by the pledge is not fulfilled. The pledge must ensure not only the repayment of the loan, but also the payment of the appropriate interest and penalties under the contract provided for in case of non-performance.
Surety agreement. Under this agreement, the guarantor is obliged to the creditor of another person (borrower, debtor) to be responsible for the fulfillment by the latter of his obligation. The borrower and the guarantor are liable to the creditor as solidary debtors.
Guarantee. This is a special type of surety agreement to secure an obligation between legal entities. Any financially stable legal entity can be a guarantor.
Credit risk insurance. The borrowing company concludes an insurance contract with the insurance company, which provides that in case of default on the loan within the established period, the insurer pays to the bank that issued the loan compensation in the amount of 50 to 90% of the loan amount not repaid by the borrower, including interest for using the loan.
9) By purpose of the loan:
General loans , used by the borrower at its own discretion to meet any need for financial resources. In modern conditions, they have limited use in the field of short-term lending; they are practically not used in medium and long-term lending.
Targeted loans that imply the need for the borrower to use the resources allocated by the bank solely for solving problems determined by the terms of the loan agreement (for example, paying for purchased goods, paying salaries to staff, capital development, etc.). Violation of these obligations entails the application to the borrower of the sanctions established by the agreement in the form of early withdrawal of the loan or an increase in the interest rate.
The above classification is considered to be traditional. In the Republic of Kazakhstan, there is a slightly different, more concise classification:
1) by terms of provision:
Short-term (up to 1 year);
Medium-term (from 1 to 3 years);
Long-term (over 3 years);
2) by objects of lending:
Lending to replenish working capital;
Lending for the renewal and acquisition of fixed capital;
3) by lending methods:
Balance lending;
Turnover lending.
The need and possibility of attracting a bank loan is due to the regularities of the circulation and turnover of capital in the process of reproduction: in some places, temporarily free funds are released, acting as a source of credit, in others there is a need for a loan, for example, to expand production. Thus, credit contributes to economic growth: the lender receives payment for the loan, and the borrower increases and renews his productive assets.
The need to increase competitiveness increases the requirements for the quality of enterprise management. The growth of the level of management is unthinkable without the use of a formalized, scientifically based approach to making managerial decisions. Let's consider an example of a scientific approach to making a decision on attracting a bank loan to finance the current expenses of an enterprise.
The methodology for calculating the need to attract a bank loan to finance the current expenses of an enterprise is a logical procedure for assessing the feasibility of using a bank loan as an external financing tool.
The calculation of the need for a bank loan is based on the following basic conditions. First, the possibility of attracting credit resources is considered as one of the alternatives to eliminate the time gap between the inflow and outflow of funds. The decision to attract a loan is made subject to the greater economic feasibility of this method of external financing, in comparison with other available methods of covering the cash gap. Secondly, the planning system in the enterprise must support the simulation function. To select the optimal source of financing, it is important to be able to carry out a preliminary assessment of the consequences of making various decisions - in this case, when using certain methods of covering the cash gap.
The process of calculating the need to attract a bank loan to cover the time gap between the inflow and outflow of funds includes two stages: identification of the need for funds and analysis of the use of various alternatives to cover the identified deficit. Each stage is characterized by its task and content. The task of the first stage is to identify in advance the size of the cash deficit, the date of its occurrence, as well as the period of its persistence. The task of the second stage is to determine the most effective way to cover the shortage of funds. Consider the content of each stage.
The task of the first stage is implemented within the framework of the operational management of the enterprise based on the budgeting system - the technology of planning, accounting and control of funds and financial results. The budgeting system includes a hierarchy of financial plans that combines the main budgets (cash flow budget, income and expenditure budget, balance sheet budget) and operating budgets, activity budgets not related to core activities.
The hierarchy of budgets determines the direction of information flows: the main budgets are formed from data provided by budgets of a lower level: operating, as well as budgets for investment and financial activities. In turn, the data necessary for the formation of operating budgets are formed on the basis of data from internal management accounting registers that record the parameters of business operations at the enterprise. The specified registers of internal management accounting are individual for each enterprise, the common thing for them is the reflection of changes in the parameters of the state of the enterprise under the influence of ongoing operations. As a rule, internal accounting registers include databases that record the state of enterprise resources, orders accepted for execution, specifications for various types of products manufactured by the enterprise, production programs, etc.
The information necessary to solve the problem of identifying the fact of a shortage of funds, its magnitude, duration is directly reflected in the cash flow statement. Cash flow statement - a financial document that presents in a systematic form at a given time interval the expected and actual values of receipts and disposals of the company's cash. The cash flow statement shows the forecast values of the cash balance for a specific date and signals the planned need for additional resources. The data used as input to the cash flow statement is generated by the output of operating budgets. Operating budgets are estimates of planned and actual values of cash inflows and outflows, grouped according to the basis of the company's transactions of the same type. The specific breakdown depends on the specifics of the enterprise, as an example, the following typology can be proposed: the budget of receipts and deductions (revenues from sales by product type, deductions in the form of direct costs for certain types of raw materials), budget for wage payments, budget for tax payments , the budget for supporting costs (deductions for fixed costs), the budget for financial activities, the budget for investment activities. Some of the information provided in operating budgets is permanent, i.e. does not depend on the business activity of the enterprise (fixed costs, part of wages, part of tax payments). The values of other articles directly depend on the operations performed by the enterprise. Limiting the consideration of the financial model of an enterprise at the level of budgets is inappropriate, since in order to solve the problems of “consider options for mobilizing funds” and “evaluate the effectiveness of the operation”, it is necessary to be able to carry out simulation modeling that allows you to play various options for making managerial decisions regarding the choice of option, consequences choice of which will be optimal. A method for calculating an enterprise's need for a bank loan, built on the principle of the possibility of maintaining a dialogue "what will happen if?" should take into account the peculiarities of the formation of operating budgets, the content of which depends on the parameters of the functioning of the enterprise, recorded in the system of registers of internal management accounting.
After identifying the size of the cash deficit, the date of its formation and the period of operation, it is necessary to take measures to eliminate it. First of all, the cause of the deficit is clarified, the first option to cover the deficit may be the elimination of its cause. All available alternatives can be conditionally divided into three groups. The first group includes various options for modifying the structure of cash flows associated with a change in the schedules of planned payments (consideration of options for delaying payments, possibilities for reducing the period of planned cash receipts). The second group includes options for making changes to the production program of the enterprise in order to postpone the production schedule in time, which requires an outflow of funds (purchase of raw materials, components). The third group of ways to cover the shortage of funds includes instruments for attracting external financing, in particular a bank loan. Each option to cover the cash deficit has individual characteristics associated with the nature of the consequences caused by the use of this option. For example, the use of a bank loan is characterized by the need to pay the loan amount and interest on it by a certain date, the receipt of funds is expected not earlier than a certain date.
The choice of a specific method of covering the shortage of funds is carried out in two stages. At the first stage, methods are selected from the available alternatives, the expediency of which is confirmed by strategic calculations. For example, a request to counterparties to speed up settlements may reduce the level of trust in the enterprise, so it is not advisable to use them. At the second stage, the consequences of using each of the options are analyzed. The selection criterion is the financial condition of the enterprise, caused by the use of a specific method of covering the deficit. The consequences of any business transaction performed by the enterprise are reflected in its financial condition, which can be preliminarily assessed using a simulation system. Using the relationship “internal accounting registers operating budgets main budgets: cash flow budget and budget of expenses and incomes”, we can analyze the consequences of choosing each option for covering the cash deficit, reflected in the structure of the cash flow statement and the structure of income and expenses. Taking into account the consequences of using each of the available alternatives will allow you to make the best choice.
When is a loan justified? Are there situations where the use of credit funds is beneficial? Judging by bank advertising, loans are always for the benefit of mankind. But we are adults. Let's try to bring out some situations when a loan is acceptable using the example of https://turbomoney.kz/, while excluding all sorts of unbridled "Wishlist". The common features of such loans will be the inability to pay for anything in the required time from savings and the absolute need to purchase this “something”.
Loan to buy a home
This is an extremely common and, most importantly, fairly justified loan. Buying a home in modern conditions, except on credit, is beyond the means of most of our compatriots. But it is a mortgage loan that can save many people from problems, both family, organizational, and purely psychological. Moreover, investing money in real estate is profitable, since over the past two decades, housing has been constantly rising in price, at a rate that significantly outpaces inflation.
Credit for treatment
The need to use borrowed funds for the treatment of oneself or a loved one is not an uncommon need. It is desirable, of course, to acquire insurance and some kind of reserves in advance, but what to do if they are not enough or simply not there for some reason? Here you already have to take such a serious step as a loan.
Loan to pay for education
Our knowledge is our only real asset that is not subject to inflation. Although modern education has a highly controversial effectiveness, a good formal education is not superfluous. It is very difficult to measure the benefit from this action in terms of money. Therefore, in the case of using credit funds to pay for tuition, everything should be thought out very carefully and how it should be calculated. What education will give you, will you be able to earn more with it, how much, including interest on the loan, will this education cost you, how long will it take to pay off the loan, etc. You can’t make such decisions spontaneously, otherwise you risk wasting money and time.
Savings loan
Strange as it may seem, but this is also quite real. How can we save anything with a loan if we pay the credit institution quite decent money on top of what we took?! This is possible, for example, if we purchase something with which we can reduce our costs or increase our income. It can be some kind of meters for water and light (calculate carefully - our housing and communal services are happy to make those who purchase meters pay more than others) or some kind of tool with which your work will become more efficient, and, accordingly, your earnings will increase. It is possible to save money by purchasing on credit some goods at wholesale prices in large quantities, which you and your family will use for several years.
Credit is not always bad
In many situations, a loan is a tool with which a reasonable person can solve their problems much more efficiently and with less loss, or vice versa, make some kind of breakthrough in well-being.
A financial instrument is one of the new economic categories of a market economy. A financial instrument is any contract that simultaneously increases the financial assets of one entity and the financial liabilities of a debt or equity nature of another entity.
TO financial assets relate:
· cash;
· contractual right to receive funds or any other type of financial assets from another enterprise;
· a contractual right to exchange financial instruments with another enterprise on potentially favorable terms;
shares of another company.
TO financial obligations contractual obligations include:
pay out cash or provide some other type of financial asset to another enterprise;
· to exchange financial instruments with another enterprise on potentially unfavorable terms (in particular, such a situation may arise in the event of a forced sale of receivables).
As follows from the definition of a financial instrument, two specific characteristics can be distinguished that allow one or another operation to be qualified as a financial instrument:
1) the transaction must be based on financial assets and liabilities;
2) the operation must be in the form of an agreement (contract).
In particular, inventories, tangible and intangible assets, deferred expenses, advances received, etc. do not fall under the definition of financial assets, and therefore, although holding them has the potential to give rise to cash inflows, there is no right to receive certain financial assets in the future. With regard to the second characteristic, for example, the relationship with the state over tax arrears cannot be considered a financial instrument, since these relationships are not of a contractual nature.
Financial instruments are divided into primary which include loans and borrowings, stocks, bonds, other debt securities, current account payables and receivables, and secondary , or derivatives (sometimes in the literature they are called derivatives), which include financial options, futures, forward contracts, interest rate swaps, currency swaps.
Most financial instruments are securities traded on the derivatives market. According to the Civil Code of the Russian Federation (RF) security – is a document certifying
observance of the established form and mandatory details of property rights, the exercise or transfer of which is possible only upon its presentation . When a security is transferred, the new owner automatically transfers all the rights certified by it in the aggregate, including non-property rights, if any are implied based on the nature of this security (for example, the voting right inherently associated with ordinary shares).
The main indicators characterizing securities are:
· well ;
· dividends (for shares);
· interest (for other securities);
· profitability ;
· issue volume ;
· volume of transactions ;
· transaction characteristics (primarily options);
· urgency (for securities with maturity).
Securities have a number of fundamental qualities that distinguish them from other types of documents related to property rights. These qualities are: presentability, negotiability and marketability, availability for civil circulation, standardization and serialization, adjustability and recognition by the state, liquidity, risk.
One type of security is bond. She belongs to the class debt securities , which also includes deposit and savings certificates of banks, government short-term obligations, short-term bank bills, treasury bills and notes, bills accepted by the bank, debt certificates, etc. Debt securities are obligations placed by issuers on the stock market to borrow money, necessary to solve current and future problems.
A bond is the most common form of debt. This is a security that certifies the deposit by its owner of funds in the amount indicated in the bond, and confirms the obligation to reimburse him its face value within the period specified in it with the payment of a fixed percentage, unless otherwise provided by the terms of the issue. Bonds are issued:
registered or bearer (coupon);
interest or interest-free (targeted for goods or services);
freely circulating or with a limited circulation.
Unlike shares, bonds of economic entities do not give their owners the right to participate in the management of a joint-stock company, but, nevertheless, they are an attractive means of investing temporarily free funds. This is due to the following circumstances:
Unlike stocks, bonds have a guaranteed return.
· bonds belong to the group of marketable assets and, if necessary, are converted into cash;
· payment of interest on the bonds of a joint-stock company is made on a priority basis, i.е. before accrual of dividends on shares;
· in the event of liquidation of the company, bondholders also have a priority right over shareholders;
investing in government bonds provides certain tax incentives (the income from these securities is not taxed, the tax on operating
· walkie-talkies with government bonds are charged at a reduced rate, bonds can be used as collateral when obtaining a loan, etc.).
Income on interest-bearing bonds is paid by paying coupons for bonds. The payment can be made periodically or at a time when the loan is repaid by accruing interest on the face value. Coupon - part of a bond certificate, which, when separated from the certificate, gives the owner the right to receive interest (income), the amount and date of receipt of which are indicated on the coupon.
bill of exchange - an order security certifying an unconditional obligation of the drawer (promissory note) or other payer specified in the bill (bills of exchange) to pay, upon the expiration of the term stipulated by the bill, the sum of money indicated in it to the owner of the bill (bill holder). As a promissory note, a promissory note has a number of features, the most significant of which are as follows:
· abstractness , which consists in the fact that the bill is not legally tied to a specific contract, i.e. having arisen as a result of a certain transaction, the bill is separated from it and exists as an independent document;
· certainty expressed in the fact that the holder of the bill is free from objections that may be put forward by other participants in the bill of exchange or in relation to them;
· right to protest
, consisting in the fact that if the debtor does not pay the bill, the bill holder can make a protest, i.e.
on the next day after the expiration of the payment period, officially certify the fact of refusal to pay at the notary's office at the location of the payer;
· joint responsibility which, in the event of a timely protest, the holder of a bill has the right to bring a claim against all persons connected with the circulation of this bill, and against each of them separately, without being forced to observe the sequence in which they undertook.
There are promissory notes and bills of exchange. In operation with promissory note two persons are involved: the drawer, who is obliged to pay the bill, and the bill holder, who has the right to receive payment. Bill of exchange (Draft) is issued and signed by the creditor (drawer) and is an order to the debtor (drawee) to pay within the specified period the amount indicated in the bill to a third party - the first holder (remittent). A bill of exchange can be transferred from one holder to another by means of a special endorsement - endorsement executed by the endorser on the reverse side of the bill or, if there is not enough space for transfer entries, on an additional sheet - allonge . Through endorsement, a bill can circulate among an unlimited circle of persons, turning into a means of repaying debt claims.
The list of details that must contain a bill is strictly regulated by law. The bill contains:
the name "bill" included in the text of the document and expressed in the language in which this document is drawn up;
indication of the payment term;
specifying the place where the payment is to be made;
the name of the person to whom or by order of whom the payment is to be made;
Indication of the date and place of drawing up the bill;
Signature of the person who issued the bill (drawer), etc.
There are treasury, bank and commercial bills. treasury bill is issued by the government and represents a short-term government obligation with a maturity of three, six or twelve months. bank bill issued by a bank or an association of banks (issuing syndicate). The income of the owner of a bank bill is calculated as the difference between the redemption price equal to the face value and the sale price carried out at a discount. commercial bill used for crediting trade operations. As a rule, a bill of exchange is used in the transaction, and the bank acts as the payer.
The most popular are bank bills. The main reasons for this are:
· profitability - depending on the term, amount, currency and reliability of the bank, the profitability of its bill can vary significantly;
· reliability - in particular, promissory notes issued by groups of large banks bearing joint and several liability for them have almost absolute reliability;
· liquidity - Almost all issuing banks provide for the possibility of early repayment. Bills of exchange can be used as payment by drawing up an endorsement on the bill;
· collateral value A bill of exchange can be used as a savings instrument and as collateral. Some exchanges accept bank notes as a deposit guaranteeing the execution of futures contracts.
Receipt – is a monetary document of the form established by law, containing an order from the owner of the account that issued the check to pay the owner of the check the amount of money indicated in it. The organization of settlement transactions with the help of checks involves the interaction of at least three parties: the issuer of the check, i.e. the person who wrote the check, the holder of the check, i.e. the person who accepted the check as payment for the goods, works or services provided, and the payer of the check, i.e. the bank where the drawer's account is held. The check serves as the most important means of payment, which expresses the unilateral obligation of the issuer of the check to pay the check if the payer refused to pay. When settling by checks, the account holder - drawer - gives an unconditional written order to the bank that issued settlement checks to make payment of the specified amount to the holder of the check or at his order. The obligation to pay a check is determined by an agreement between the issuer of the check and the paying bank.
Deposit certificate - a written certificate of a credit institution (issuing bank) on the deposit of funds, certifying the owner's right to receive the amount of the deposit and interest on it after the expiration of the established period.
Deposit certificates are intended mainly for business entities. The attractiveness of a certificate is that it can be transferred from one owner to another, and its price at the time of transfer depends on the capacity of the secondary market, the maturity of the certificate and the current interest rate for financial instruments of the same class.
bank savings certificate - has the same mechanism of action as a certificate of deposit, but is intended for individuals. The certificate can be issued for a fixed period or on demand. In case of early return of funds on a fixed-term certificate, at the initiative of its owner, a reduced percentage is paid, the amount of which is indicated in the agreement concluded when depositing money for storage.
Bill of lading - is a document of title, with the help of which maritime transportation of goods is formalized. List of mandatory
details and conditions for compiling this document are defined in the Merchant Shipping Code of the Russian Federation. The bill of lading is issued by the carrier to the sender after acceptance of the goods and certifies the fact of the conclusion of the contract between them. As a security, a bill of lading can be registered (the name of a specific recipient of the cargo is indicated), order (the cargo is issued by order of the sender, recipient or bank), to the bearer (any person who presented this document can be a consignee).
Stock - equity securities confirming the right of their owner to participate in the management of the company (usually, with the exception of preferred shares), in the distribution of the company's profits and in receiving a share of property proportional to its contribution to the authorized capital, in the event of liquidation of this company.
One of the most important conditions for the functioning of the capital market is information about securities. There are following types of information:
Statistical (market value, volume of transactions, dividends, profitability, etc.);
· analytical (analytical reviews and assessments, recommendations to investors, court precedents, etc.);
· normative (legislative and normative acts regulating the issue and circulation of securities).
A bank loan is one of the most common forms of credit relations in the economy, the object of which is the process of transferring funds to a loan on terms of urgency, repayment, and payment.
A bank loan expresses economic relations between lenders (banks) and lending entities (borrowers), which can be both legal entities and individuals. The bank form of credit is the most common form, since it is banks that most often provide loans to entities in need of temporary financial assistance.
A bank loan is provided exclusively by financial institutions licensed to carry out such operations.
The main principles of lending, including banking, which must be observed in the process of issuing and repaying loans, are:
return urgency;
target character;
payment;
security;
differentiation;
Repayment is the feature that distinguishes credit as an economic category from other economic categories of commodity-money relations. Without repayment, credit cannot exist. Repayment is an integral feature of the loan, its attribute.
The urgency of lending is a necessary form of achieving loan repayment. The principle of urgency means that the loan must not only be returned, but returned within a strictly defined period, i.e. the factor of time finds concrete expression in it. And, therefore, urgency is the temporal certainty of the repayment of the loan. In market conditions of management, this principle of lending is given, more than ever, special importance:
1. The normal provision of social reproduction with money, and, accordingly, its volumes, growth rates depend on its observance.
2. Compliance with this principle is necessary to ensure the liquidity of the commercial banks themselves. The principles of organizing their work do not allow them to invest attracted credit resources in non-refundable investments.
3. For each individual borrower, the observance of the principle of urgency of repayment of the loan opens up the possibility of obtaining new loans from the bank, and also allows you to maintain your self-supporting interests without paying increased interest on overdue loans.
The target nature of the loan involves the issuance of loans for strictly defined purposes, which, like objects, can vary widely. Each potential borrower, when applying for a loan, must indicate a specific purpose. The bank, having issued a loan, is called upon to check its intended use, and in cases of violation of the terms of the loan agreement, it must apply sanctions.
The principle of payment for a loan means that each enterprise-borrower must pay a certain fee to the bank for temporarily borrowing money from it for its own needs. The implementation of this principle in practice is carried out through the mechanism of bank interest. The bank interest rate is a kind of "price" of a loan. The payability of the loan ensures that the bank covers its costs associated with the payment of interest on borrowed funds from others, the costs of maintaining its apparatus, and also provides a profit to increase the resource funds of lending (reserve, statutory) and use for own and other needs.
The main factors that modern commercial banks take into account when setting a fee for a loan:
Base interest rate on loans provided to commercial banks by the Central Bank of the Russian Federation;
The average interest rate on an interbank loan, i.e. for resources purchased from other commercial banks for their active operations;
The average interest rate paid by the bank to its customers on deposit accounts of various types;
The structure of the bank's credit resources (the higher the share of borrowed funds, the more expensive the loan should be);
Demand for a loan from business executives (the lower the demand, the cheaper the loan);
The term for which the loan is requested, and the type of loan, or rather the degree of its risk for the bank, depending on the security;
Stability of monetary circulation in the country (the higher the inflation rate, the more expensive the loan fee should be, since the bank has an increased risk of losing its resources due to the depreciation of money).
Under the conditions of a planned economy, the principle of credit security was interpreted by our economists very narrowly: only the material security of credit was recognized. This meant that loans had to be issued for specific material assets at various stages of the reproduction process, the presence of which throughout the entire period of using the loan testified to the security of the loan and, therefore, to the reality of its return. Only with the adoption at the end of 1990. The Law “On Banks and Banking Activities” gave commercial banks the opportunity to issue loans against various forms of loan collateral adopted in international banking practice, and subsequently enshrined in the Civil Code of the Russian Federation. This is a pledge obligation, a guarantee agreement, a guarantee agreement, etc. Security of obligations under bank loans in one or several forms at the same time is provided by both parties to a credit transaction in a loan agreement concluded between them.
The differentiation of lending means that commercial banks should not unequivocally approach the issue of issuing a loan to their clients applying for it. Credit should be provided only to those economic agencies that are able to repay it in a timely manner. Differentiation of lending should be carried out on the basis of indicators of creditworthiness - the financial condition of the enterprise. These qualities are assessed by analyzing the balance sheet for liquidity, the provision of the economy with its own sources, the level of its profitability at the moment and in the future.
The cumulative application in practice of all the principles of bank lending makes it possible to observe both the national interests and the interests of both subjects of the credit transaction: the bank and the borrower.
The terms of the loan are as follows:
coincidence of interests of both parties of the credit transaction;
the availability, both of the creditor bank and the borrower, of the ability to fulfill their obligations;
the possibility of realizing the pledge and the availability of guarantees;
ensuring the commercial interests of the bank;
conclusion of a loan agreement.
A bank loan is classified according to a number of criteria:
I. By main groups of borrowers:
Farm loan;
to the population;
State authorities.
II. By terms of use:
Poste restante;
Urgent:
Short term (up to 1 year),
Medium-term (from 1 to 3 years),
Long-term (over 3 years).
Based on the characteristics of the Russian market economy, it is also necessary to consider another classification of term loans: short-term (up to 1 year) and long-term (more than 1 year).
Short-term loans are provided to fill the temporary shortage of the borrower's own working capital. Short-term credit serves the sphere of circulation. The most actively used short-term loans in the stock market, trade and services, in the mode of interbank lending.
Medium-term loans are provided for production and commercial purposes. The most widespread in the agricultural sector, as well as in lending to innovative processes with an average amount of required investment.
Long-term loans are used for investment purposes. They serve the movement of fixed assets, differing in large volumes of transferred credit resources. They are used for crediting reconstruction, technical re-equipment, new construction at enterprises of all spheres of activity. Long-term loans received special development in capital construction, the fuel and energy complex.
III. By appointment (direction):
Consumer;
Industrial;
Trade;
Agricultural;
Investment;
Budget.
IV. By payment methods:
Loans repaid in installments (parts, shares);
Loans that are repaid at a time (for one specific date).
Loans repaid in installments over the entire term of the loan agreement. Specific conditions for the return are determined by the contract. Always used for long-term loans.
Loans repaid in a lump sum by the borrower. This traditional form of repayment of short-term loans is optimal, because. does not require the use of a differentiated interest mechanism.
V. Depending on the scope of functioning:
Loans involved in the expanded reproduction of fixed assets;
Loans involved in the organization of working capital (loans directed to the sphere of production, and loans serving the sphere of circulation).
VI. By way of issuance:
Compensatory - the loan is sent to the current account of the borrower to reimburse the latter his own funds invested either in inventory or in costs.
Payment - the loan is directed directly to the payment of settlement and monetary documents presented to the borrower for payment for credited activities.
VII. By lending methods:
One-time loans provided on time and for the amount stipulated in the agreement concluded by the parties.
A credit line is a legal obligation of the bank to the borrower to provide him with loans within a certain period of time within the agreed limit.
Credit lines are:
Revolving - this is a firm obligation of the bank to issue a loan to a client who is experiencing a temporary shortage of working capital. The borrower, having repaid part of the loan, can expect to receive a new loan within the established limit and the term of the agreement.
A seasonal credit line is provided by a bank if the company periodically has working capital needs related to seasonal cyclicality or the need to create stocks in the warehouse.
Overdraft is a short-term loan, which is provided by debiting funds from the client's account in excess of the balance on the account. As a result, a debit balance is formed on the client's account. An overdraft is a negative balance on a client's current account. An overdraft may be permitted, i.e. previously agreed with the bank and unauthorized, when the client issues a check or payment document without having the bank's permission to do so. Overdraft interest is calculated daily on the outstanding balance, and the client pays only for the amounts actually used by him.
VIII. By types of interest rates:
Loans with a fixed interest rate, which is set for the entire period of the loan and is not subject to revision. In this case, the borrower assumes the obligation to pay interest at a constant agreed rate for using the loan, regardless of changes in the market conditions for interest rates. Fixed interest rates apply for short-term loans.
Loans with a floating interest rate. Floating rates are called such rates, which are constantly changing depending on the situation in the credit and financial markets.
Loans with a stepped interest rate. These interest rates are reviewed periodically. Used during periods of high inflation.
IX. By type of borrower:
Loans to legal entities;
Loans to individuals
Sizes: large, medium and small.
XI. By availability of collateral:
Unsecured (blank) loans;
Secured, which, according to the nature of the security, are also divided into pledged, guaranteed and insured.
Trust loans, the only form of security for the return of which is a loan agreement. This type of loan does not have specific collateral and therefore is provided, as a rule, to first-class creditworthiness customers with whom the bank has long-term ties and has no claims on previously issued loans.
Pledge agreement. Pledge of property (movable and immovable) means that the creditor-mortgagee has the right to sell this property if the obligation secured by the pledge is not fulfilled. The pledge must ensure not only the repayment of the loan, but also the payment of the appropriate interest and penalties under the contract provided for in case of non-performance.
Surety agreement. Under this agreement, the guarantor is obliged to the creditor of another person (borrower, debtor) to be responsible for the fulfillment by the latter of his obligation. The borrower and the guarantor are liable to the creditor as solidary debtors .
Guarantee. This is a special type of surety agreement to secure an obligation between legal entities. Any financially stable legal entity can be a guarantor.
Credit risk insurance. The borrowing company concludes an insurance contract with the insurance company, which provides that in case of default on the loan within the established period, the insurer pays to the bank that issued the loan compensation in the amount of 50 to 90% of the loan amount not repaid by the borrower, including interest for using the loan.
XII. By degree of risk:
Standard;
non-standard;
Doubtful;
Hopeless.
XIII. Purpose of the loan:
General loans , used by the borrower at its own discretion to meet any need for financial resources. In modern conditions, they have limited use in the field of short-term lending; they are practically not used in medium and long-term lending.
Targeted loans that imply the need for the borrower to use the resources allocated by the bank solely for solving problems determined by the terms of the loan agreement (for example, paying for purchased goods, paying salaries to staff, capital development, etc.). Violation of these obligations entails the application to the borrower of the sanctions established by the agreement in the form of early withdrawal of the loan or an increase in the interest rate.
The need and possibility of attracting a bank loan is due to the regularities of the circulation and turnover of capital in the process of reproduction: in some places, temporarily free funds are released, acting as a source of credit, in others there is a need for a loan, for example, to expand production. Thus, credit contributes to economic growth: the lender receives payment for the loan, and the borrower increases and renews his productive assets.
The methodology for calculating the need to attract a bank loan to finance the current expenses of an enterprise is a logical procedure for assessing the feasibility of using a bank loan as an external financing tool.
The calculation of the need for a bank loan is based on the following basic conditions. First, the possibility of attracting credit resources is considered as one of the alternatives to eliminate the time gap between the inflow and outflow of funds. The decision to attract a loan is made subject to the greater economic feasibility of this method of external financing, in comparison with other available methods of covering the cash gap. Secondly, the planning system in the enterprise must support the simulation function. To select the optimal source of financing, it is important to be able to carry out a preliminary assessment of the consequences of making various decisions - in this case, when using certain methods of covering the cash gap.
The information necessary to solve the problem of identifying the fact of a shortage of funds, its magnitude, is reflected in the cash flow statement. Cash flow statement - a financial document that presents in a systematic form at a given time interval the expected and actual values of receipts and disposals of the company's cash. The cash flow statement shows the forecast values of the cash balance for a specific date and signals the planned need for additional resources. The data used as input to the cash flow statement is generated by the output of operating budgets. Operating budgets are estimates of planned and actual values of cash inflows and outflows, grouped according to the basis of the company's transactions of the same type.
After identifying the size of the cash deficit, the date of its formation and the period of operation, it is necessary to take measures to eliminate it. First of all, the cause of the deficit is clarified, the first option to cover the deficit may be the elimination of its cause.
The main task of the management of any company - the effective management of the limited resources at its disposal - in relation to cash management in the short term is solved by manipulating a number of parameters that determine the duration of the financial cycle. Recall that the financial cycle for an enterprise is a period of time that begins with the delivery of raw materials, materials and components or the receipt by suppliers of an advance for their supply and ends with the moment the enterprise receives payment for products shipped to customers. With proper management of the financial cycle, you can significantly affect the needs of the enterprise in working capital and the speed of their turnover, which will not only affect the efficiency of the business, but also the company's need for working capital.
What are the possibilities for this?
Much-needed cash can be released by the enterprise, in particular, by changing the duration, resource intensity and other parameters of the production cycle (i.e., the method or technology for carrying out the main activity). At the same time, it is clear that, for example, in the case of considering the feasibility of changing technology, additional investments cannot be dispensed with, and the analysis of the consequences of such decisions should be carried out as carefully as possible.
In addition to such decisive transformations as the replacement of equipment, the change of technology, the implementation of reengineering of the enterprise, affecting the very foundations of its activity, it is possible to use less radical means, in particular, the deployment of broad industrial cooperation (i.e., the purchase of part of the components instead of their independent production) .
You can also increase cash flow by increasing sales. However, when implementing attempts to "play" with the price of products, one should at least analyze the break-even of production.
We should not leave aside the consideration of the possibilities of accelerating the turnover of stocks (or, more broadly, resources). Their presence, obviously, is determined by the company's desire to reduce the risk of more serious losses that may arise as a result of the shutdown of the main activity, the emergence of unsatisfied demand, etc., than from incurring additional costs, the level of which is determined by the volume of these reserves. At the same time, considering this issue, the term "reserves" should be understood quite broadly: we can talk about stocks of final products, semi-finished products and raw materials, natural and labor resources, as well as cash reserves.
What should be the amount of inventory? As long as the potential losses outweigh the costs of holding inventory, it is beneficial to have a certain amount of inventory, but the final decision should only be made after a detailed analysis of all possible options. At the same time, practice shows that in the process of a thorough study of the causes of the occurrence of certain reserves, it may turn out that one can do without them altogether or, at least, reduce their volumes.
A company can also influence the duration of the financial cycle and the efficiency of its operations by using certain means of payment and schemes for settlements with suppliers, consumers, etc. At the same time, its relations are important not only with other participants in the supply chain, but also with banks, since in this case it is possible to choose certain financial instruments and optimize their parameters (interest, speed of payments, etc.). Accordingly, the correct choice of these tools can be made only after comprehensive calculations and comparison of various schemes for their use. The choice of a specific method of covering the shortage of funds is carried out in two stages. At the first stage, methods are selected from the available alternatives, the expediency of which is confirmed by strategic calculations. For example, a request to counterparties to speed up settlements may reduce the level of trust in the enterprise, so it is not advisable to use them. At the second stage, the consequences of using each of the options are analyzed. The selection criterion is the financial condition of the enterprise, caused by the use of a specific method of covering the deficit.
The modern economy cannot be imagined without bank lending. The credit market uses various types of bank loans, methods and tools of lending. It is the use of tools that makes it possible to carry out a credit operation, however, in scientific works, the concept of bank lending tools has been studied extremely poorly. This determines the relevance of this work.
Before revealing the concept of "bank lending instruments", let's consider the interpretation of the term "tools" in explanatory dictionaries.
In explanatory dictionaries, the term "tool" is interpreted in several ways:
- as "a tool (mostly manual) for the production of any work";
- as "a means used to achieve something" .
There are different types of tools:
- musical instrument;
- medical instrument;
- metalwork tool;
- an economic tool;
– financial instrument;
– stock market instrument;
- money market instrument
– lending instruments, etc.
You can list different types of tools and there will be as many of them as there are types of human activity.
The subject of this work is the study of bank lending instruments, which, in our opinion, belong to the group of economic instruments.
According to Raizberg B.A., Lozovsky L.Sh., Storodubtseva E.B., economic instruments are “ways and means of managing the economy, regulating economic processes and relations. Together they form economic institutions. The actual economic instruments include volumes and structure of production, investments, structure and forms of ownership, money supply and parameters of money circulation, budget revenues and expenditures, transfers, taxes and tax rates, tax incentives, wage rates, prices, loans, bank credit rates. and deposit interest, the refinancing rate of the central bank, internal and external loans, government purchases, tenders, auctions, sanctions, fines, economic incentives, benefits, preferences.
A variety of economic instruments are financial instruments.
According to a number of authors, a financial instrument is “financial obligations and rights traded on the market, as a rule, in documentary form. These include: securities, monetary obligations, currency, futures, options, etc.”
In our opinion, just as the financial market can be divided into several segments, financial instruments can be divided into several types:
– stock market instruments;
–money market instruments;
– credit market instruments;
– investment market instruments;
–investment market instruments, etc.
According to Blank I.A. “Stock market instruments are the instruments by which transactions in the stock market are carried out. The main stock market instruments include stocks, bonds, savings certificates, investment certificates (primary stock instruments or first order stock instruments); options, futures contracts, forward contracts, swaps and other derivatives (equity derivatives or secondary equity instruments)”.
The point of view of Blank I.A. shared by other authors, noting that “stock market instruments are various types of securities that are sold and bought on the stock markets; First of all - stocks, bonds.
“Money market instruments are the instruments by which the main operations with the monetary assets of the enterprise are carried out. The main money market instruments include payment documents, deposits, financial loans and others.
In the course of the study, we came across various interpretations: “credit market instruments”, “credit instruments”, “credit instruments”. It should be noted that there are very few interpreted data in the scientific literature. Obviously, all these concepts are very close, but for the purposes of our work, we will study the term "lending instruments".
Some authors believe that the instruments of lending are the loans themselves. According to Litvinova A.V., Chernaya E.G. “lending instruments must be considered from the standpoint of the fact that they characterize the ways of practical implementation of the basic principles of credit - urgency, payment and repayment. Accordingly, the number of credit instruments in bank lending should include:
- the amount of borrowed funds;
-credit term;
- interest on the loan;
– grace period without interest;
– credit repayment conditions;
– prevention of non-repayment and overdue debt on a loan (assessment of the borrower's creditworthiness, control of the amount of debt, including overdue debt), etc.”
We share this point of view.
The loan amount is the amount of credit that can be issued to a bank customer. The amount of the loan depends on the amount requested by the borrower and on his real ability to return the money.
Loan term as a lending tool. According to the term, all bank loans can be divided into short-term, medium-term and long-term.
Interest on a loan is one of the most important instruments of bank lending. The bank can lend to the borrower at the market rate of the loan, at an increased or preferential rate.
The market interest rate of a loan is the price that has developed in the banking credit market at the present time, under the influence of the objective laws of the market.
Bank lending at an increased interest rate is applied to borrowers with a high credit risk (if they violate the terms of lending), in addition, an increased interest rate can be used for long-term lending if an increase in the cost of loans is predicted.
The value of the rate on a bank loan in countries with market economies is influenced by external and internal factors.
External factors include: the level of inflation, the level of the refinancing rate, the development of the banking system, the development of the financial market, etc. The main internal factor influencing the amount of interest on a loan is the credit policy of the bank.
Trifonov D.A. notes that if "lending is considered, then the main tool with which the approved plans for credit activities will be implemented, as well as control over it, is the bank's credit policy, which is a special document approved by the supreme governing body of the bank" .
The credit policy of the bank, in addition to choosing the goals and objectives of lending, as a rule, is a whole list of internal regulations and procedures governing the organizational side of credit operations, i.e., the procedure for granting loans, methods for ensuring their repayment, the procedure for using loans by borrowers and at the same time, bank control, the procedure for determining interest rates, the procedure for repaying loans, a list of documents for drawing up loan agreements, agreements for securing loans and opening loan accounts, a list of documents for assessing the financial condition of borrowers. The bank's credit policy defines its approaches to assessing the real market value of collateral in lending, and also regulates the duties, powers and mechanism for interaction between employees and bank departments involved in lending operations, in the formation of the bank's loan portfolio and its management. The credit policy of the bank determines the priorities in the choice of customers and credit instruments, includes the priorities, principles and goals of a particular bank in the credit market, as well as financial and other tools used by this bank to achieve its goals in the implementation of credit transactions, the rules for their execution, the procedure organization of the credit process.
This bank loan portfolio management tool cannot be attributed only to a certain type of instruments, since it can also be attributed to tools characteristic of certain levels of management (because it is used by almost all levels of management), and certain stages of management (since it affects all stages of loan portfolio management ) .
It should be noted that the interest rate on a loan as an instrument of bank lending can act in two forms:
1) fixed interest rate;
2) floating interest rate.
Fixed interest rate is a fixed interest rate that is set for a certain period of time and does not depend on market conditions.
A floating interest rate is a rate that can change throughout the loan period.
This bet consists of the following parts:
– constant value;
- variable.
Due to the second part (variable), the size of the bank loan rate will change. There are the following loan repayment conditions:
– a loan repaid at a time (usually at the end of the contract term);
- a loan repaid in installments (in equal or unequal shares, within the time limits set by the bank).
One of the tools of bank lending is credit monitoring.
“Credit monitoring is a systematic continuous bank control in the course of using a loan:
– credit quality;
– compliance with the terms of the loan agreement;
– the state of securing the loan, which ultimately guarantees its repayment in compliance with its profitability for the bank established in the contract” .
Credit quality control consists in the fact that bank employees must monitor the financial condition of the borrower after issuing a loan, since its deterioration may affect the risk of not repaying the loan at all or on time and the risk of non-payment to the bank of interest on the loan.
Monitoring compliance with the terms of the loan agreement is reduced to checking that the borrower complies with the lending limits (credit lines) established for him, the intended use of the loan, as well as the timeliness of paying interest on the loan, repaying the principal debt in full and on time based on the schedule established in the loan agreement.
The control of ensuring the repayment of loans includes on-the-spot checks of the presence of pledgers, the state of their quality characteristics and compliance with the security regime, an assessment of the current market value of the pledge, its liquidity in order to fulfill its purpose in a credit transaction.
Thus, bank lending instruments characterize the ways of implementing the basic principles of a loan - urgency, payment and repayment. Bank lending tools are the amount of borrowed funds, loan term, interest on the loan, loan repayment conditions, prevention of non-repayment and overdue debt on the loan (assessment of the borrower's creditworthiness, control of the amount of debt, including overdue), etc. The nature of the use of bank lending tools has a direct impact on the efficiency of bank lending, so banks need to ensure their proper use in lending operations.
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