Bill avalization – operation according to which the bank undertakes the responsibility to pay the bill for payer in case of failure to pay the bill by such payer within payment period.
Advantages
| For buyer (payer) | For seller (bill owner) |
|---|
- opportunity to get a deferred payment from the seller of goods/services, which allows not to use your own working capital / not to attract credit resources;
- economy - much cheaper tool than traditional lending;
- expanding/establishing mutually beneficial relationships with seller’s of goods/services
- tool of settlement with budget in part of taxes payment
| - absence of risk of non-payment for delivered goods by guaranteeing the bank such payment;
- possibility to use avalized bill in further settlements with counterparties;
- expanding / establishing mutually beneficial relationships with buyers of goods/services.
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| Conditions of bill avalization |
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| Types of bills which could be avalized | - commodity bills, which are issued for the purchase of vehicles, agro-chemistry and other goods/services;
- bills that are issued to pay excise duties (for companies who use alcohol and other excisable goods/raw materials in the current activity)
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| Currency of bills | UAH |
| Requirements for collateral | cash cover, property rights for deposit | real estate, equipment, vehicles, other assets and their combination |
| Insurance of pledged property | - | at any insurance company approved by the bank on client’s choice |
| Bill avalization cost[1] | - commission for bill avalization: 2%-2,4% p.a., min. 33 USD [2] per month – in case of commission payment on a monthly basis / min. 100 USD [2] per quarter – in case of commission payment on a quarterly basis
| - commission for setting the limit (one-time): 0.5%-1%, min. 100 USD [2]
- commission for bill avalization: 4% - 4,5% p.a., min. 33 USD [2] per month – in case of commission payment on a monthly basis / min. 100 USD [2] per quarter – in case of commission payment on a quarterly basis
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| Other bank’s commissions | other commissions could be set as per arrangement with a client |
| Other possible costs | payment for the services of third parties (insurance company, notary, property appraiser, etc.) - according to the tariffs of such third parties chosen by the client for receiving the relevant services |
[1] bill avalization costs could be set individually as per arrangement with a client
[2] commission indicated in foreign currency to be paid as per official NBU rate indicated on the date of its payment
Package of documents for bill avalization depends on structure of the operations and collateral. You can obtain detailed information by contacting your personal manager or by visiting our branch in your city/town.
