Last year, 34.2% of SMEs tried to access financing lines
from credit institutions , according to the CEPYME report . If you have a small
business or want to start a business idea, you will probably also need to use a
loan. In that case, you should know the differences between collateral and
guarantee , two terms that are often used interchangeably but are not
synonymous.
What is a guarantee?
The guarantee is a contract by which the lender ensures
repayment in the event of non-payment of the loan . Through a legal agreement,
the borrower, in this case the self-employed person or the SME, is obliged to provide
a second “source of payment” to which the borrower can resort if he does not
receive the agreed amounts. smoothtechi
There are different
types of guarantees:
Personal guarantee
The loan applicant responds with his equity in case of
default . This is usually a very low-cost, basic collateral used to cover
relatively small loans with short-term repayment.
Real guarantee
This guarantee is based on specific assets or rights , so it
usually gives the lender more confidence. The most common example is the
mortgage guarantee on a real estate, such as the premises where the activity is
carried out, although it can also be carried out on production machinery, for
example, so that the lender can requisition it in case of non-payment . mucommucation
What is an
endorsement?
The guarantee is a type of guarantee through which a third
party, such as the SGR, agrees with the lender to face the debt if the
guaranteed party does not comply with the payment . In this way, it is possible
to reduce the risk that the operation represents for the lender and the
self-employed or the SME can access more advantageous credit conditions.
Guarantees are usually used when the borrower does not have
enough assets to guarantee the lender the repayment of the loan, although
recently incorporated companies, which do not have a credit history to support
them with the bank, also tend to resort to them because they know that for an
SGR your project may be perfectly viable. appleinfocom
It is customary to use the guarantees when very high amounts
requested s or want to improve financing conditions, providing a more
professional image and reducing the level of risk to which the bank is exposed
to granting the loan.
There are different
types of guarantees:
Technical
endorsement.
It is used to guarantee the ability of the company to comply
with the contractual obligations that it has contracted, so that the guarantor
entity responds to the client for the breach of non-economic obligations.
Financial or economic
guarantee.
It guarantees operations in which it is necessary to pay
certain sums of money within a certain period of time . It can be a commercial
guarantee, in which case operations such as the sale of goods and the splitting
of payments are guaranteed, or a financial guarantee, which is used when
requesting a loan or credit from a bank.
In this article you
can better understand the differences between technical and financial guarantee
How is the guarantee
different from the guarantee?
The guarantee is a type of guarantee, although all
guarantees are not guarantees . The main difference between collateral and
guarantee refers to the guarantor of the operation. In the case of the
guarantee, you respond directly to the borrower with your assets or that of
your company, in the case of the guarantee, a third actor comes into play who
is responsible for you to the borrower. computerlg
The procedure to be followed makes another difference
between collateral and guarantee . To provide a personal or real guarantee, it
is enough that you link the equity or movable or immovable property to the
loan, but to obtain an endorsement you will have to present your business
project, the company's accounts and the growth projections. smarttechnofy
