Financing has different forms - It may be a one-time or saving issue borrowed money. In the first case, the scheme of issuing money is as simple as possible and understandable, and in the second there are a number of nuances. Consider more, what is the feature of the tranche of money and what it is.
Definition of concept
Money tranche is a share of a large amount (loan, credit, debt to the supplier), transferred from one person to another. The term is most often used in business, economics and banking. For example, when a legal entity takes a big loan in the bank, but receives it not one amount, and parts, throughout a certain period. Simple words, each incoming loan share is tranche.
There are other interpretations of the concept of "tranche", but they do not directly relate to money. So, under the meaning of the word "tranche" understand the partial release valuable papers, Shares of bond loans.
Cash tranche characteristics:
- The terms of the listings are always defined in advance, and fixed contract.
- Several trenches within the same agreement may be different in sums or equal.
- Always translated throughout a certain time. The one-time listing is not correctly called the tranche.
If we bring a small result, the conditions of considerable financing do not wear a clear regulation. Especially when it comes to lending to large and medium-sized businesses - it may be replenishment current means, lending to the project, upgrades or expansion of production. That is, both parties are discussing the conditions, but the key states of the contract establishes the one that issues funds.
Cash flow tranches are found in different fields:
- Support for the International Monetary Fund. The IMF lists the means with equal trenches in order to replenish the gold and foreign exchange reserve.
- Emission of cash.
- Lending by banks of commercial companies, manufacturing enterprises. These are credit lines on large sumsissued to the card or transfer to the current account. Funding details are discussed individually, secured by a loan agreement.
- Among the products for individuals are interest-free lending to installments, credit cards. Such financing is not correctly called Poranshev, but the scheme of issuing and paying is similar.
Credit tranches
Credit tranche is part of the loan listed from the bank of the borrower. In the overwhelming majority of cases, the term refers to financing middle and large business. If you draw an analogy with everyday life, Powed lending - installment, credit cards.
Key options:
- The interest rate on the loan may be united for all trenches or different, fixed or floating.
- The percentage of the loan coverage is determined individually.
- Overpayment is charged only after actually obtaining a loan, and not after approval and signing loan agreement.
- Provided both ruble and currency loans.
The form of issuance is a renewable or non-renewable credit line. In the first case, the Bank approves a certain amount of funds, conditionally - 2 million rubles. After transferring the first tranche in the amount of 800 thousand. The client pays 300 thousand rubles. Available limit will be equal to 1.8 million rubles (2 million - 500 thousand + 300 thousand).
The non-renewable credit line involves the phased issuance of borrowed funds, without increasing the available limit. All payments from the borrower are sent to the repayment of debt. For example, under the same conditions of financing in the amount of 2 million rubles, the Client receives 600 thousand rubles, pays 300 thousand - the available amount is 1.4 million, the amount of debt is 300 thousand rubles.
This form of lending is beneficial to both parties: the bank finds the client, but its risks are reduced, as the money is issued by parts, and the borrower, receiving approval, can take funds as needed.
Credit lines open many banks, for example, Alpha Bank. In this financial institution, representatives of secondary and large businesses can take a loan in one or several currencies, secured or without securing, for a long or short term. Financing conditions are individual for each client and are discussed at the meeting. The purpose of the expenditure of funds The client determines itself:
- replenishment of working capital;
- purchasing OS;
- refinancing loan portfolio;
- modernization of production;
- financing contracts.
Small business can take advantage of the renewable credit line. The amount is from 500 thousand to 10 million rubles, but depending on the revolutions, the conditions may be revised. The term of the loan is up to a year, the repayment period is up to one and a half years, the period of issuing a tranche is 1-6 months. After payment, part of the money is sent to the repayment of interest, the other - renews available limit borrowed money. Purpose of opening credit line - Replenishment of working capital.
Tranche from the IMF.
International Monetary Fund provides financial support on a larger scale - he gives money not to companies, but countries. Usually, total amount It is divided into 4 equal shares - 25% each.
The procedure for issuing, deadlines and purpose of the use of funds are assigned to the Treaty. The recipient provides monetary support for compliance with economic and / or political conditions. If the contract items are violated, subsequent receipts are suspended.
Tranche is the transfer of a part of the amount specified in advance. In most cases, the conditions for cooperation of two legal entities Fastened by the relevant contract. The concept is often used in the provision of financial services individuals, for example, in discharge credit cards. This is not a mistake, but most often the term is relating to large monetary amounts and the interaction of persons at the international level or in the field of large business.
Tranche (Tranche) translated from French means a part or share of securities, bonds, the release of which occurs to improve market conditions.
Due to the specifics of using this financial instruments It can be conventionally distinguished by the scope of its use as follows:
- Investing and securities market.
- Lending to organizations in banks.
- Providing state tranches of the IMF.
Understanding the word "TRANCHE" should proceed from the above-described delimitation and methods for providing financial assistance. What are tranches in investing? Securities (CB) with the same conditions, regardless of when a part of the general release is used. That is, part of the Central Bank gradually is granted when the terms of the transaction by the borrower were carried out in terms of payment of the first issue.
What are tranches in lending? The Bank establishes the limit of issuing funds for the organization-borrower (credit line), and within the framework of this restriction issues the necessary amounts. At the same time, the Borrower's organization has the right to use the new loan share of the first requirement, if all obligations to pay for debt were performed after the first transmission.
They are comparable to the credit line for organizations, with the exception of the conditions for their provision. As a rule, the IMF puts forward certain requirements, with the non-compliance with which the country may remain without funding. The IMF demands may be political and economic.
Credit tranche and conditions for its provision
Tranche, described above. The concept of "credit line" is often found, which is identical to the title described above. As part of the contract between the Bank and the borrower, all the conditions of repayment and the provision of the credit line are stipulated. The focus of this document is assigned to the issuance limit. Exceeding the calculated restriction under the transmission contract is impossible. But on the unused balance of the credit funds, the Bank may impose additional interest (about 0.5% per year, depending on many factors). Thus, the bank stimulates the borrower to fully benefit the loan.
The conditions on which the credit tranche is issued is listed below.
- Return of funds in accordance with the payment schedule.
- Accrual interest for use credit funds.
- Company solvency or additional provision on the loan in the form of its own profitable assets of the borrower.
Tranches in lending
What is the provision of tranche in the conditions of one understand this question is quite easy if you do not forget the sense of the word Tranche. Recall from French it translates as "part". Accordingly, the provision of tranche is the issuance of the share of funds within the framework of the established limit for the borrower.
Each tranche can be provided both at the request of the borrower during the period of the contract, and in clearly defined deadlines. All nuances of the transaction are registered in the loan agreement. The borrower is obliged to fulfill its obligations on time and in full. And the lender, in turn, provide a tranche at the request of the borrower organization.
Advantages of credit line
Unlike the issuance of a standard loan by the Bank, more attractive for both borrowers and financial organizations. The main advantages of the transmission within the credit line are as follows.
- Unlimited number of trenches. Repeated use of credit funds. The credit line can be renewable with a certain issuance limit and not renewable. With the second version of the loan, the organization can use several trenches, but their total amount cannot exceed the established limit. If the credit line is renewable, then when redeeming the tranche, the borrower can use it again. For example, a limit on a credit renewable line 1,000,000 dollars. The borrower expired the first tranche of $ 300,000, paid it during the contract (2 months), which means that it can again use 1,000,000 dollars. And in the case of a non-renewable credit line, the next limit of the loan would have made only $ 700,000.
- Interest for the use of tranc may be accrued different ways - may be standard, that is, fixed, regardless of the provided part of the limit for the entire validity period of the contract. Or may have specific accrual conditions. The bank can offer a borrower of various percentage calculation conditions for each tranche. Interest in any case is charged only on the spent amount (tranche).
- Write-off of debt occurs automatically when funds are received on the settlement account of the organization, which is very convenient, as it saves time.
Market economy is not required without frequently used economic terms. One of these is a tranche. Many are interested in what the word "Tranche" means. This word is from the European state - France. Translated into Russian means a part, a slot, piece, share.
Decoding concept
Money tranche is a share of a loan that is given on different conditions some time later. Moreover, the period of issuing is within the term of the contract.
To answer questions about the trench what it is simple wordsIt is necessary to push off the concept of "amount of funds". Imagine that this amount is issued by a certain part of money, loan, payment. This will be tranc. This term also means the following:
- individual parts of the credit amount;
- the equity part of the bond loan issued in stages;
- the volume of securities that differ in risk level and final income is issued in one period;
- cash bills with equal advantages that are issued at different times.
Thus, it can be said that it is a financial instrument. If a large amount of money is supposed to be issued, then the initial funds are issued after the conclusion of the contract. The rest of the rod in the form of a tranche comes after the fulfillment of the conditions for the provision of the first part of the money. The following parts are issued when satisfying the provision of previous parts. This tool is used in such financial fields:
- the securities market, where the initial supply of papers with tremendous shares is expected;
- the area associated with the activities of international financial institutions that provide loans to states;
- banks that exercise lending from different companies.
Tranche provision
What is the provision of tranche in the presence of a certain agreement on issuing funds? The provision of equity implies the issuance of securities that are associated with the contract or contract, but differ in the probability of depreciation, the period of issuing, the date of payment and other conditions. Issuing resources may have different times Appeals constituting several months or several years. All conditions of granting are prescribed in the contract concluded.
Tranche on credit
Typically, credit funds are issued by banks at a time and suggest a repayment for a certain period. But there are situations where a big organization is credited. In this case, the risk increases for the lender. Therefore, such a financial instrument is applied as a tranche.
To answer the question of what is a tranche on the loan, first need to disassemble the concept of a credit line. This line implies the issuance of credit funds with certain shares. Moreover, subsequent shares are issued in a certain period after compliance with the requirements of the Agreement. The credit line pursues the goal of replenishing working capital organizations that finance current activities. Principles of such a line:
- with a timely return of debt, the borrower receives the following part of the resources;
- excess limit is unacceptable;
- perhaps the percentage interests for the unsupened means;
- the volume of the credit line is established individually after the analysis of the balance sheet.
Providing Tranz Alfa-Bank: in Ipture by credit card Tranche provision operation means that Alpha Bank provided you a loan for the amount spent on a credit card, estimated period And these tools passed accounting
Credit lines are two types:
- Renewable - they suggest a limit of debt, namely, the funds are provided by the borrower repeatedly under the condition of a complete or partial return of debt.
- Non-renewable - they suggest the issuance limit, that is, borrowed funds can be applied once, even if the debt is fully repaid.
Thus, in the field of lending, the money tranche is part of the credit funds issued by the borrower in the fulfillment of obligations prescribed in the loan agreement.
Tranche and credit card
Credit cards imply the use of borrowed funds if necessary. The map has a specific limit that implies the amount of funds that the cardholder can dispose. Tranche on a credit card corresponds to the separation of the limit on the individual shares that the cardholder can spend.
This type of cards usually use different production and trading enterprises. When applying the method of issuing funds, the credit card shall be aimed at a periodic increase in working capital. At the same time, it is monitored by means of restriction by restrictions under consuming operations.
The bank provides such credit parts on the cards automatically. This happens after the conclusion of the contract, where the conditions and the timing of the tranche will be spelled out.
Advantages of trenches for consumers
When searching for a response to the question of what the money tranche is, it turns out that this is obtaining the amount of funds, subject to the approval of the provision conditions. The advantages of this financial instrument include:
- simplifying the process of issuing funds;
- interest accrual on actually issued funds;
- value interest rate Constant throughout the contract.
The use of tranche in the economy allows you to stimulate many organizations on improving the efficiency of activities.
The meanings of many economic and financial termswho appeared in Russian with development market relationsFor many Russians are still incomprehensible. One of these concepts that came to us from France is Tranche. Let's try to figure out what this word means and in what cases it is customary to use.
The term "tranche" in the literal translation means "share, part, piece" (from the French concept of TRANCHE). This word has several values, but they all have financial base. If you say generally, Tranche is part cash flow. In a narrower sense, this term may mean:
- credit resources provided by the borrower in separate parts;
- a certain proportion of a bond loan, which is issued in several stages;
- securities issued at the same time, but having a different level of risk and profitability;
- emissy cash bills The same dignity carried out in different years.
Having received an answer to the question of what tranches should be found out what their specificity should be found.
Features of the provision of credit trenches
Traditionally, loans are issued to borrowers for a certain period of time. However, customers are increasingly preferred to take cash Parts, choosing a loan line from numerous banking programs.
What is a tranche on the loan? The answer to this question can be found by finding out the value of the term "credit line". This variation of the loan is now very popular among legal entities and small business representatives.
From classical loans, such a type of financial resources is characterized by the fact that the cash is provided by the borrower not one amount, and separate parts (so-called tranches) within the framework of the current loan.
The credit line opens in order to replenish working capital - to finance current activities. Enterprises have the opportunity to spend money on the purpose specified in the Agreement and return within the limit within the limit.
The contract for granting a loan in the form of a credit line contains the following points:
- approved limit;
- type of credit line;
- credit period (usually no more than 2 years);
- commission for the provision of a credit line;
- terms of security.
Specific conditions for issuing money resources are indicated for each tranche separately. Here are reflected such items as:
- tranche sum;
- interest rate for the use of borrowed funds;
- tranche duration (repayment time);
- the ability to extinguish a loan ahead of schedule;
- conditions target use credit resources.
Basic types of loans in the form of a credit line
What is a credit tranche? What kind of credit line will be convenient and profitable for you? You can get answers to these questions now.
A loan tranche is its part issued by the borrower under the same agreement (within the current credit line). Allocate:
- Renewable credit lines, i.e. with a debt limit are loans that, according to the current contract, allow the borrower to use the funds many times. The main condition for obtaining the next tranche is a complete or partial repayment of the current debt.
- Non-renewable credit lines, i.e. with the issuance limit - make it possible to use the borrowed funds only once. Choosing the entire set limit, the borrower can no longer receive financial assistance from the bank, even if full repayment loan.
What are tranches and what are their advantages when lending? Let's try to figure out.
The main benefits of the client
Responding to the question of what the provision of a tranche is and for which it is necessary, several points should be allocated:
- The process of issuing a loan is greatly simplified: the collection of a package of documents and the signing of the Agreement is made once.
- During everything established period Lending interest will be accrued only to the amount reflected in the client's loan account, i.e. on the actually issued loan.
- The interest rate set as a result of the consideration of the application will apply during the entire period of lending. This means that all subsequent tranches will be issued at one rate.
What should the credit line design be started?
The process of obtaining such a loan begins with submission to the right banking institution. After writing a statement, the borrower receives a list of documents that will be required to check his trustiness. Employees of credit institutions produce analysis and find out the following points:
- whether the loan issuance is suitable;
- allows Lie financial condition the borrower to pay attention to the loan issued;
- what property the applicant can provide as collateral.
Making a collateral and full liquidity assessment economic analysis The activities of the enterprise (or IP), the Bank makes a decision on the possibility of issuing a loan.
Now, when we already know exactly what tranches are, it is possible to make a decision on the need and profitability of a loan in the form of a credit line. The choice is yours!
Many novice entrepreneurs who think about the development of their case are looking for profitable lending programs for business. At this stage, young businessmen are trying to understand what tranche is and whether he is profitable. This economic instrument is effectively used in specific areas. In particular, on financial stock exchanges, as well as in lending. And credited as state financial organizations international levels and different companies with banks and other institutions. The process proceeds under various conditions: it all depends on the level of lending, as well as the status of the lender.
General provisions
One citizens are needed money for everyday needs, others - to develop their own business. In all cases, the loan amount is not fixed, and the risks of the bank in all situations are different in terms of level. Different in these situations and lending form.
One way to reduce the risks of non-return of the loan, acts on the credit tranche. Loans can be provided by entrepreneurs with the full amount either on the credit line. This is essentially the same loan that is issued by parts. But there is one rule: the fulfillment of all the requirements of the Agreement by the Client under a certain period.
For example, many are aware of how loans from MFI are issued. They are not fully given, but trench. There are only four of them, they are equal in sum. The condition to continue the cooperation of the Borrower Country with IFA is the fulfillment of the country of claims not only of economic nature! The policy of the state is closely connected with this issue.
Loan Tranche reduces the risks of non-payment of loan
Credit line
This is a contract, two parties are involved in it: a borrower and a bank (organization), which credits it. The contract discusses the obligations of the parties to each other in front of each other.
The Bank, for its part, assumes the obligation to provide funds in the Decisions of the agreed amount, in the previous time intervals applied by the second party of all provisions of the contract.
This means that if the contract has undertaken the obligations under the contract, received the first tranche, paid a debt to him in a timely manner, it is entitled to count on the next receipt of money from the lender. But within the credit line.
What is it - credit line? It turns out that this is a combination financial means. Their borrower has the right to use during the actions of the loan agreement.
The limit on the credit line is strictly fixed, exceeding its borrower has no right.
The bank, for its part, can begin the accrual of a borrower of interest for the fact that within a certain tranche, credit funds were not used. This phenomenon can be called a peculiar stimulation to ensure that the borrower uses funds within the tranche. The amount of the issued funds is determined personally: it all depends on the balance of the borrower and the turnover of funds at its enterprise (in the organization). This includes a production reserve, an analysis of the activities of the borrower, production in an incomplete stage. As well as other sources of creating working capital.
Types of credit lines:
- Renewable. Cash can be provided to the borrower not one, but several times, but under the condition of complete, partial execution of contractual obligations with the existing debt deposition.
- Non-renewable. The line involves the issuance limit. Cashs are used only once. Even if the debt is repaid in full.
Tranche is the amount issued to the loan, subject to the execution by the borrower of its obligations regarding the previous amount
Terms of issue
Tranche in lending area is part borrowed money. They are issued by the contract of the contract if provisions and obligations prescribed in it are fulfilled. To obtain a credit tranche, the borrower must meet certain conditions, and also correspond banking requirements. For example:
- Return of funds to the creditor completely, in a timely manner, in accordance with the debt repayment schedule, without delay.
- The issuance of money under the percentage, prescribed in advance in the contract.
- The borrower must be able to provide financial institution Asset. They will serve as ensuring the commitment.
Tranche in lending is a part of funds. The bank issues them on general conditions Loan, but when executed by the borrower of all obligations assumed. If the borrower is completely, on time executed the required under the contract, the lender issues the following part of the money. Tranche can be provided at a specific time or at the request of the borrower. This position is pre-negotiated. For example, if the first tranche was consumed, the income received, the debt was returned, the borrower has the right to ask the second side of the issuance of a new amount of money, without waiting for a period of time of issuing a new amount defined in the contract. Term, the circumstances of the issuance of the next portion of the money are recorded in the contractual document.
The main content of the loan contract
The Credit Provision Agreement establishes the conditions:
- stipulated by the parties of the cash limit;
- renewability of the credit line;
- lending duration (most often up to 24 months);
- the amount of remuneration charged for the provision of borrowed funds;
- pledge.
Conditions tranche are specified individually and prescribed in the contract
For each tranche individually designated conditions for issuing borrowed funds. Therefore, specific items are prescribed in the document, including:
- tranche size;
- its cost;
- debt repayment period;
- the possibility of repayment before the specified period;
- terms of use of finance.
Pros credit line
Credit line: What is this tool, what is its benefit? This tool is needed to both parties: a borrower and a bank (or other lender). Before granting a loan with a one-time provision of a certain amount of money, the borrower, the credit line has special advantages. Among them are distinguished:
- Borrower using tranche, can use credit funds many timesBut only within the requested amount.
- Credit lines can be resumed in the presence of some conditions. In this case, the borrower applies a tranche for the first time, it deviates it in a timely manner, and then once again refers to it, but for the amount limited by the limit framework. If the credit line of the non-renewable form, this implies the possibility of using them once. After that, the borrower has the right to apply only its residue. For example, if a bank client is available to a credit line, it renewed in 10,000,000, he returned the first tranche in 400,000, until the end of the period of action of the contractual relationship, the borrower has the right to use the amount in 100,000,000. If the credit line is not renewed, it is logical that the borrower has the right to use the balance from 1000000.
- Favorable% rates on the use of borrowed funds. % can not change. It is not prohibited to accrue them before the end of the loan agreement. For example, by agreement between the parties, the Bank has the right to accrue different rates across a separate tranche transmitted to the borrower. % can be accrued in two ways: the amount of money in the use of the borrower or on their balance. It once again stimulates borrowers to use the entire amount of the tranche completely.
- Convenient payment of interest on the loan. The bank that credits the organization (enterprise, company) has tolerance to the current account, which focuses borrowed funds. Debt is deducted automatically as soon as money comes to the dedicated account. Repayment of debt in this way is convenient for the borrower.
Getting a tranche promotes business development
Order of receiving Tranche
The use of trenches renewable credit line is a very effective economic instrument for business, its development. Such a loan is used in many Western countries, including Russia. Obtaining borrowed funds begins with the design of the relevant application to the credit institution. After that, the potential borrower clarifies the set of documents required by the Bank to assess solvency.
Managers analyze the information received from the potential client, which they draw from documents. In particular, credit specialists analyze the feasibility of issuing borrowed money, the financial analysis Borrower, its fragility, the presence of property, pledge. Competently assessing the liquidity of the loan, a comprehensive economic analysis of the Company's work, IP, the Bank makes a decision on the issuance of a loan, or in refusing to this action.
