Methods for granting deferment
Deferment is also considered one of the measures within the framework of credit debt restructuring. Such measures are carried out if a reliable borrower finds himself in a difficult financial situation, and in order not to aggravate his situation, the bank revises the current lending conditions. The form of granting a deferment can be expressed as follows:
- Credit holidays - when the payment of the next payment is delayed for a certain period, until the moment when the borrower can fulfill his obligations again.
- Increasing the total loan term and reducing the amount paid according to the payment schedule - reducing the credit load by increasing the number of payments under the loan agreement.
These concessions are provided in accordance with the internal policy of the bank or at the request (application) of the client himself. Such events may not be provided for by the bank’s program, so the client must initiate them independently.
In both cases a separate agreement must be concluded. Such an agreement, as a rule, is called a credit debt restructuring agreement. The conclusion of an agreement is mandatory, since here we are talking about changing the initial terms of the loan agreement. In a separate case, the agreement is drawn up as an annex to the main agreement between the borrower and the bank.
The borrower is advised to carefully study the terms offered by the bank and agree to them if they provide for an improvement in his current situation. This is precisely the purpose of restructuring - it should include assistance for a borrower in a difficult situation.
Contracts with deferred payment
Often, buyers offer gullible sellers to ship the goods before payment. In this case, the supplier runs the risk of never receiving payment. Returning the goods to the seller will be difficult, and sometimes even impossible. Let's give an example from life. One foreign company agreed to supply goods to a Russian company without full advance payment. When the cargo was undergoing customs clearance, the domestic buyer “suddenly” went bankrupt. According to the terms of the supply contract, the recipient of the valuables was obliged to transfer customs payments to the treasury. The buyer did not do this because there simply were not enough funds in his accounts. As a result, customs officers confiscated the goods and sold them on the Russian market.
How can sellers protect themselves from such unscrupulous buyers? To do this, you need to pay close attention to the legal aspects of advance supplies.
Commercial loan
The definition of the concept of “commercial loan” contains paragraph 1 of Article 823 of the Civil Code. Its essence is as follows. Under an agreement for the supply of goods, the buyer can receive a loan. The seller can issue a loan in the form of an advance, defer or installment payment for its products or goods.
Thus, the legislator proposes to consider deferred payment as one of the types of commercial loans. At the same time, the relations of the parties under an agreement with the condition of “advance” delivery are regulated by Chapter 42 “Loan and Credit” of the Civil Code.
Interest for “deferred payment”
It should be noted that the legislator has established a “presumption of payment” for a commercial loan (Article 809 of the Civil Code of the Russian Federation). Therefore, the lender has the right to receive interest from his debtor on the loan amount. Their size is determined by the terms of the contract between the seller and the buyer. If the agreement does not indicate the amount of interest, then it is considered equal to the bank refinancing rate on the day the debt is paid by the borrower (at the location of the payer).
Thus, the lender has the right to demand that the borrower pay interest on the transaction, even if this is not provided for in the supply agreement (clause 7 of the appendix to the information letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated November 17, 2004 No. 85).
If the borrower does not repay the loan amount on time, he will have to pay interest to the lender (clause 1 of Article 811 of the Civil Code of the Russian Federation). If their size is not specified in the contract, you need to refer to paragraph 1 of Article 395 of the Civil Code. It says that interest should be determined at the discount rate of bank interest, which is in effect in the location of the creditor on the day the debt is repaid.
Interest must be accrued from the first day of late payment until the loan is repaid. This should be done even if the borrower has paid the interest provided for in Article 809 of the Civil Code.
Sanction or contractual obligation?
Sometimes entrepreneurs mistakenly believe that if the debtor fails to pay the loan amount on time, interest can be charged under Articles 809 and 811. However, interest under Article 809 is, in essence, a contractual obligation. Therefore, they can be accrued until the date when the debt must be repaid.
Interest under Article 811 of the Civil Code is a sanction. This conclusion is supported, for example, by the decisions of the Presidium of the Supreme Arbitration Court of March 24, 1998 No. 6395/97 and No. 5801/97/847. Moreover, such interest can be accrued only on the principal amount of the debt - without taking into account the cost of deferred payment (unless the agreement provides for another condition).
Legal nuances
In judicial practice, the size of the refinancing rate (Article 809 of the Civil Code of the Russian Federation) and the accounting value of bank interest are the same. Currently, it is equal to 12 percent per annum (telegram of the Central Bank of the Russian Federation dated December 23, 2005 No. 1643-U). A natural question arises: what exactly is the penalty for the defaulter? After all, using the opportunity to defer payment before and after the expiration of the debt repayment period, the borrower is obliged to return the same amount of interest to the lender. However, in this case it is worth noting that the Civil Code contains a clause: “unless otherwise provided by law or contract.” Therefore, the parties to the transaction have the right to establish their own conditions in the agreement, according to which interest will be accrued.
Thus, in order to avoid misunderstandings, it is advisable to include in the text of the contract provisions on the “payment” of deferred payment, as well as determine the amount of the penalty for violation of payment deadlines.
However, if the amount of accrued interest is clearly greater than the damage from the unfulfilled obligation, the court has the right to reduce it. Moreover, he can do this at his own discretion.
To avoid the situation described, the lender must prove to the court that he is right. That is, it is necessary to provide documents that confirm the appropriateness of the established penalty. However, it should be remembered that the court accepts only that evidence that is relevant to the case under consideration (clause 1 of Article 67 of the Arbitration Procedure Code of the Russian Federation).
Simultaneously with the claim for the recovery of a penalty, it makes sense for the lender to present a demand to the debtor to compensate for his losses. In this case, the court will have no reason not to accept evidence that the penalty established by the lender corresponds to its costs. By the way, in the future the creditor may waive its claims against the debtor*. However, the lender will still be able to draw the court’s attention to evidence that the amount of the penalty corresponds to its losses. As a result, the court is unlikely to reduce the penalty rate set by the seller or will reduce it slightly. Before making claims for damages against the debtor, the creditor needs to know for sure whether it is worth doing so. After all, when filing a claim, he will have to pay a state fee, the amount of which depends on the amount of the claim. Subsequently, when the demands are withdrawn, the state duty will not be returned to the creditor.
Special rules
Often, a deferred payment agreement provides for the opportunity to repay the debt in installments. Moreover, if the borrower does not return the next part of the payment on time, the lender has the right to demand that the buyer repay the entire amount of the debt ahead of schedule, including interest.
All recommendations considered can be used regardless of the type of main obligation under a contract with deferred payment. It can be not only the sale of goods, performance of work or provision of services. A commercial loan is also considered a deferment or installment plan for the payment of agency or commission fees, payments for transportation, forwarding services, rent, premiums under an insurance contract, etc.
However, for some types of agreements the legislator has provided special rules. Thus, Articles 488 and 489 of the Civil Code regulate payment for goods sold on credit or in installments, respectively. Contracts for the purchase and sale of retail products with deferred payment also have their own characteristics (clause 3 of Article 500 of the Civil Code of the Russian Federation). Articles 951 and 954 of the Civil Code regulate the payment in installments of premiums under insurance contracts.
Sale and purchase agreements are the most common in civil transactions. Therefore, it is not surprising that the features of deferred payment under such agreements are carefully regulated by law. For example, if a buyer who received goods on credit does not pay for it on time, the lender has the right to demand that he return the unpaid property (Clause 3 of Article 488 of the Civil Code of the Russian Federation).
When selling goods in installments, the seller also has the right to demand that the buyer return the goods (Clause 2 of Article 489 of the Civil Code of the Russian Federation). However, the lender acquires such a right only if the debtor fails to make the next payment on time. The exception is the case when the buyer has paid more than half the cost of the goods.
Seller's guarantees
Goods that are sold on credit are considered pledged from the moment of transfer to the buyer until payment (clause 5 of Article 488 of the Civil Code of the Russian Federation). This rule guarantees that the debtor will fulfill his obligations under the contract. However, this measure works reliably only in relation to real estate, as well as property the rights to which are subject to state registration (Article 131 of the Civil Code of the Russian Federation). Therefore, if the subject of a purchase and sale agreement is, for example, a car, it is advisable for the seller to provide additional guarantees in the agreement. For example, he may reserve the ability to retain title documents. Without these papers, the buyer will not be able to resell the goods until he completes all payments with the seller. The agreement may also provide for a pledge of any property, a surety, a bank guarantee, etc.
The condition of deferred or installment payment can be used in any type of contract. Legislation gives merchants the opportunity to independently regulate relationships in agreements that they enter into with each other.
*In practice, it is very difficult to prove in court the connection between the debtor’s violation of contractual obligations and the lender’s losses. In addition, the latter are compensated in the part not covered by the penalty (clause 1 of Article 394 of the Civil Code of the Russian Federation). Therefore, it is better for the lender to withdraw its claims against the borrower on its own, rather than wait for the court’s refusal.
The Ministry of Finance reassured businessmen
At first, the concept of “commercial loan” was very alarming for entrepreneurs. They traditionally associated it with banking. However, the Ministry of Finance has issued several clarifying documents. And all the “i’s” were dotted by order No. 94n dated October 31, 2000 “On approval of the chart of accounts for accounting of financial and economic activities of organizations and instructions for its application.”
Eduard Babanov, lawyer at the Moscow Bar Association "Barshchevsky and Partners"
The procedure for obtaining a deferment from the bank
If the bank’s program provides for a deferment, then the likelihood of receiving it increases several times. The only thing you need to know is that a deferment is not provided to clients who have repeatedly violated the terms of the loan agreement or have long-term arrears. The service is available only to trustworthy clients whom the bank can completely trust.
If the client understands that he meets the requirements established by the bank, then in order to receive a deferment on the loan he must complete the following steps:
- Contact the bank and submit an application for the service - the application is filled out on a standard form, which is issued upon request.
- Pay a fee for the required service - a number of banks provide deferment for a fee, and charging a fee does not violate the requirements of relevant legislation.
- Receive documents confirming the activation of the corresponding service - the borrower is given a new schedule in which the payment deadlines are adjusted by agreement between the parties.
- Attach the new schedule to the main contract and conscientiously fulfill obligations under the revised terms.
If, after receiving the service, the borrower does not fulfill the agreed conditions, the bank has the right to cancel them and return the agreement to its previous position.
Registration of a deferment takes up to several days. At this time, the bank will study the client’s situation, assess the feasibility of providing him with this service, and analyze possible risks. Only after this does the credit institution make a final decision.
When to ask for deferred payments
In most cases, banks do not indicate the possibility of obtaining a loan deferment in their loan programs. Therefore, the first actions here must be taken by the borrower himself.
It should be understood that the bank is not interested in the occurrence of overdue debt. An organization needs to make a profit from issued loans without any difficulties. Consequently, it is possible to reach an agreement with the bank, since here we are talking about the mutual interest of the parties.
You must apply before any overdue debt arises. If the client understands that the next payment will be beyond his means, then it is better to contact the bank in advance. Applying in advance will increase your chances of receiving the service several times.
To do this, borrowers adhere to a certain algorithm, which in almost every case will be identical. If the client is confident that a deferment will help him solve the existing problems, then the following actions are taken to obtain it.
Drawing up an application
Unlike the case when the deferment is provided for by the bank’s program, the application here is drawn up in any form, without using a special form. In the application, the client describes the current situation (loss of job or permanent income), and in a petition form invites the bank to reconsider the terms of the loan.
You need to be prepared for the fact that the information provided by the borrower will be checked for accuracy. The bank may selectively send requests to verify information.
Collection of documents
To confirm a difficult financial situation, the borrower needs to provide documents to the bank. In this case, it will be sufficient to receive a 2-NDFL receipt, reflecting the lack of income from the employer. If the borrower is engaged in business, then a receipt in form 3-NDFL is provided for confirmation.
Certificates must be “up-to-date”. Any forgery is instantly detected by the bank, since this information can be verified through the tax authorities. If discrepancies are found, there can be no question of further delay.
Submission of documents
The collected package of documents is submitted to the bank. At this stage, the client is advised to provide any other information that the bank requests. For example, if you are planning to get a job, then the credit institution will need to provide information about the future employer and the salary expected to be received, if possible.
The bank must understand that the deferment provided will help the client and that he will again regularly pay his obligations. If a credit institution sees that the client is pursuing the goal of simply delaying the occurrence of overdue debt, then the provision of the service will be refused.
Waiting for review deadlines and receiving documents
If a deferment is not provided for by the bank’s policy, then the time frame for consideration of the application increases. A credit institution may consider a client’s request for up to 5 or more banking days. The timing of the decision cannot be changed.
If the decision is positive, the bank notifies the client about the time of arrival at the office to sign an additional agreement. To do this, the client will need to have documents with him: a general passport and other documents, the obligatory presence of which will be indicated by the lender.
After signing the agreement, the bank must hand over supporting documents to the borrower. The list may vary depending on the type of loan program. The following documents are required to be issued to the client:
- The revised payment schedule is issued in paper form and is recorded in the borrower’s personal account.
- One copy of the additional agreement - the borrower attaches it to the main agreement.
- A document confirming a change in the full cost of the loan - an increase in loan terms automatically increases the PSC indicator.
From this moment the client begins to fulfill obligations under the revised terms. It should be understood that the deferment is provided in the form in which it will be beneficial to the bank. If now the client has the opportunity to temporarily improve his financial situation, then in the future he will have to overpay (albeit not significantly) under his contract.
Brobank.ru: Credit organizations are interested in compensating for risks, so any deferment on a loan implies an increase in profits for them. On the other hand, for the borrower, this option is the only way out of the situation, so a small overpayment should be regarded as normal by them.
about the author
Evgeniy Nikitin Higher education majoring in Journalism at Lobachevsky University. For more than 4 years he worked with individuals at NBD Bank and Volga-Credit. Has experience working in newspapers and television in Nizhny Novgorod. She is an analyst of banking products and services. Professional journalist and copywriter in the financial environment [email protected]
Is this article useful? Not really
Help us find out how much this article helped you. If something is missing or the information is not accurate, please report it below in the comments or write to us by email
Payment under the contract will be received in 30 days - does it make sense to take factoring?
The lion's share of factoring companies' clients are suppliers and contractors whose contracts provide for a long deferred payment period (3-4 months or more). Without waiting for the date established in the contract, they sell the receivables to the factor and immediately receive “real” money, reducing the duration of the financial cycle and intensifying the business.
Factoring is not so popular among businesses with short payment deferrals. However, it may be useful for business, even if the customer pays for the goods or work within 30 days after the contract is completed. And you can get money quickly and easily if you apply for financing online at GetFinance.
When will factoring be profitable even with a 30-day deferment?
1. If inventory turnover is less than the duration of the deferment
, the company’s goods or services are in high demand, then the company is guaranteed to receive additional profit by obtaining financing and returning the money to circulation.
2. If cash gaps occur
the enterprise receives an additional source of funds, through which it can eliminate the problems that have arisen.
Read more in the article “How does factoring help SMEs avoid cash gaps?”
3.
If there is a shortage of working capital,
even a few days of deferred payment can have a negative impact on the business; early payment of the contract solves this problem.
This situation is common for microenterprises and small businesses: having completed one contract, the supplier or contractor cannot begin work on others until payment is received. Having received factoring, the company immediately returns the money to circulation and begins working with the next customer.
4. When working with customers, difficulties often arise in controlling payments
, especially with a large number of trenches. Small businesses cannot allocate personnel for this work, which causes disruptions in the flow of funds. By arranging factoring, the client transfers the payment control function to the financing company and can do business without being distracted by such tasks.
Why factoring is usually arranged after a long delay
No supplier or contractor wants to wait a long time for payment from the customer. The company strives to receive money under the contract immediately, return it to circulation and make a profit again.
To learn how to receive early payment under a contract, read the article “What is factoring?”
Most clients of factoring companies are enterprises whose agreement with the customer provides for a long deferred payment (several months or even years). The fact is that until recently, before the advent of electronic factoring, the procedure for obtaining financing was lengthy and labor-intensive:
- All document flow took place in “paper” form, with the involvement of courier services for sending documents.
- Signing agreements and agreeing on terms required personal meetings.
- To submit an application, it was necessary to collect a voluminous package of documents and certificates.
- The verification of applications at the factoring company was carried out manually.
As a result, it took at least several weeks to obtain financing and required significant financial investments. In such conditions, receiving early payment under a contract in the form of factoring financing turned out to be profitable if:
- The contract amount was significant - that is, all costs were recouped due to the amount of additional profit.
- The time that the client was able to “gain” (that is, the period from the issuance of financing until the expiration of the deferment under the contract with the customer) made it possible to receive this additional profit.
Just a few years ago, factoring was not available for companies with small contract amounts (small and medium-sized businesses) and short payment deferrals. It often happened that the customer paid for the contract before the factoring company agreed on the application for financing.
Five reasons to apply for online factoring on GetFinance with a payment deferment of 30 days
With the advent of electronic services and online factoring, the situation has changed radically. On GetFinance, any company can obtain financing without lengthy approvals or significant financial and labor costs.
Online factoring is beneficial even for companies that work with a deferred payment of 30 days, and primarily for micro-enterprises, small and medium-sized businesses:
1. There is no need to collect a package of papers and certificates
- to submit an application you only need scanned copies of the main title documents of the organization and financial reporting. The rest of the information comes to the factoring company from official databases of government agencies.
An application for GetFinance is submitted remotely in the EDI system and certified with an electronic signature. This is enough to ensure the legal significance of the process and all agreements concluded.
Read more in the article “Documents for factoring online - only 10 minutes to submit an application”
2. All stages of the factoring transaction are accelerated
- no personal meetings are required, and the document flow between the supplier, factoring company and customer occurs in electronic format.
This format is especially convenient for organizations that are located far from the customer and the factoring company, as it saves a lot of time and money.
3.
Online factoring
is suitable for contracts that are paid in stages
. You can submit an application and open a limit with a factoring company in advance, and then receive financing at each stage without re-collecting documents. The period for issuing funds according to the register does not exceed 1 business day.
If the contractor delivers the work in stages, then he wants to receive money immediately in order to pay staff and purchase materials. With the help of factoring, this can be done without withdrawing funds from circulation.
4.
Online factoring
can be arranged for any amount
– there is no minimum funding limit.
For small marketplace providers, the factoring company will transfer payment for each shipment of goods (regardless of its volume) immediately after shipment.
5.
The factoring
commission is accrued based on the actual period
of use of the funds, which means that with a short delay the “price” of factoring will be minimal.
When applying for factoring on GetFinance, there are no fixed payments, which makes obtaining financing for a short period of time as profitable as possible.
To find out your individual limit for online factoring financing, submit an application on the GetFinance website or contact a specialist by phone 8 (800) 500 55 52 .
Comments: 0
Your comment (question) If you have questions about this article, you can tell us. Our team consists of only experienced experts and specialists with specialized education. We will try to help you in this topic:
Author of the article Evgeny Nikitin
Consultant, author Popovich Anna
Financial author Olga Pikhotskaya
