Loans against I.O.U. are apart from bank credit and loan a further form of the outside financing to larger extent. By large Kapitalsammelstellen as a credit giver a loan is granted to an applicant for the credit, without this must take the organized capital market up, whose existence of the debtors confirms by issuing a certificate of indebtedness.

The certificate of indebtedness is however neither a confirmed by a document loan, still another debenture bond or otherwise a security. It serves excluding as document for the preservation of evidence and is not not stock exchangable therefore in contrast to the loan. Instead of a certificate of indebtedness the loan agreement is frequently also only sufficient as proof document.

Contracting party

Loans against I.O.U. become typically from large Kapitalanlagegesellschaften and insurance companies in addition, from social security institutions to large business enterprises with appropriate soil quality, at bodies of the public right, or to certain credit institutes with special tasks grants. While they win increasingly also elsewhere still in meaning, they for countries and municipalities are since more jeher the most important financing funds.

Kind of coming off

Contracts over loans against I.O.U. are locked directly only rarely. Usually a bank appears as a mediator. It is more frequently still received over the function than pure broker outside also with the credit-looking for a creditor debtor relationship:

• It can appear as first credit givers, whereby it reserves itself the right, the demand to third to surrender (assignment). It only later places then the loan in the entire one with one, or in parts with several of the above-mentioned Kapitalsammelstellen.

• It can appear as first applicants for the credit, whereby it receives then either the loan as refinancing loan on the condition to pass it on to certain final applicants for the credit. Or it receives larger credit contingents than global loans and passes these on, usually than custom-made single credits detailed, on first still indefinite final applicants for the credit.

Characteristics

Amount: typically between 10 millions "€ - 100 millions "€

Interest: usually about 0.25 to 0.5 per cent points over the interest rate of a comparable loan, due to the missing handels and/or liquidation possibility.

Running time: usually between 2 - 10 years

Provision of security: results from the regulations over the liabilities fund ability (see mortgage liens in the 1. Rank)

Repayment: dependent on the contract design, usually in same rates after 2-3 years of grace

Advantages

• Higher flexibility in the comparison to the industrial bonds.
• Smaller minimum volume
• Loans against I.O.U. can be taken up also by niece-missionable enterprises.
• Special credit conditions are negotiation thing, e.g. supply or repayment modalities

Disadvantages

• A premature repayment of the loan is not possible usually
• Higher interest load. This is compensated however possibly by the fact that costs can be saved here compared with the financing alternatives (emission, coupon redemption commissions, drawing and course care costs)

Literature

• Whe: Introduction to the general management economics, publishing house Vahlen, 21. Edition, 2002, P. 692

Articles in category "Loan against I.O.U."

We found here 12 articles.

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