Month: December 2020

Credit policies: what are they and how do they work?

Credit policies , a way of obtaining financing for non-current liabilities, are widely used in the business world, but care must be taken when managing them. Its operation is different from that of a credit , so it is important to be clear about how credit policies work before requesting one, to avoid finding yourself in a complicated situation.

What are credit policies?

Credit policies are a credit instrument, granted by a bank, used by companies. The bank gives the company the temporary right to have debt up to a certain limit. The policyholder only pays interest for the amounts available to him , and not for the total credit granted.

Even so, some financial entities charge a commission for undrawn amounts, so this is the first aspect to take into account when obtaining a credit policy.

Formalization of a credit policy

Credit policies are usually formalized in front of a notary. And it is at that moment when all the information regarding the policy is indicated:

  • Details of the concessionary financial institution and the beneficiary company.
  • The amount granted : maximum amount that the financial institution makes available to the company.
  • Deadlines . Expiration date of the credit policy. When this date arrives, a renewal study will be carried out or it will be renewed automatically without going through the notary, according to the agreement.
  • Commissions and interests . Commissions and interest rates that apply to award the amount:
    • Opening . Commission for opening the credit policy. It varies according to the issuing entity, but it applies because it is a variable loan.
    • Drawn balance . Commission that is applied when the beneficiary company makes a refund in the account.
    • No availability . A commission can be applied for the undrawn balance, if the company has not needed to use all the amount that has been granted.
    • Interest for exceeded . If the beneficiary company exceeds the limit granted by the financial institution. These interests will be much higher than the commission for the drawn balance.

How does it work and when is a credit policy necessary?

Credit policies are necessary, for example, when a company makes a sale that is not going to collect for a considerable time, but has to cover taxes, plus VAT during this period. That is, you need an injection of money until the moment you receive the amount of the sale.

In these cases, the company will use the policy as a self-service: if it is served little, it may not cover all your financial needs. If you go over and borrow too much money, you will end up wasting resources.

How do credit policies work?

  • Checking account : credit policies have an associated checking account , so it is used as such. Its use is usually short-term, between 6 months and 2 years, although it can be automatically extended.
  • Interest : interest on credit policies is paid quarterly, and the interest agreed upon at the firm is applied to the average debit balance for the period elapsed. Although this may vary depending on the negotiated conditions.
  • Renewal : the renewal of a credit policy depends on the financial institution , which is not obliged to do so. Given that this can be a death sentence for the company, for a short time the entity has been obliged to notify in writing 3 months in advance if it intends not to extend the policy, or to reduce the amount by an equal or higher percentage to 35%.
  • Costs : the costs for the company that takes out a credit policy are considerable. That is why it is necessary to be very clear if it is necessary to contract this type of financial operation.

Now that you know what credit policies are and how they work , you can decide if it is a suitable product for your business at the moment, or if it is rather an option to consider in the future.

How do you know where you are registered?

The registration certificate , or municipal register, is necessary for many administrative procedures and, in addition, every person residing in Spain is obliged to register in the register of the municipality in which they reside. If you reside in more than one municipality, you must register with your habitual residence , that is, where you reside for the longest time throughout the year. In this post we tell you what happens when you are registered in one place and live in another and how to know where you are registered .

Process on how to know where you are registered

How to know where you are registered is easy to find out. You have two options: in person and online.

How to know where you are registered: face-to-face procedure

You must go to the municipal register office of your current residence. In a small town, the census office is usually located in the town hall, although this is not always the case. A phone call to the town hall will get you out of doubt.

Once the office is located, go to it and request verification of your registration . If everything is correct, they can give you a certificate indicating your place of residence. If there is a problem, you should check it at the registry offices of those cities where you have previously resided.

How to know where you are registered: online procedure

It is also possible to check where you are registered through the internet. You must go to the page of the National Institute of Statistics (INE) . To carry out this check you must have an electronic certificate , since it is necessary to certify with certainty that the person who is requesting the information is you, so it is necessary to have the electronic DNI.

How can I modify the pattern if it is not correct?

If the data in the register is not correct, you must modify it. It may be the case of being registered in one place and living in another , so you should know that the registration must be carried out in the town where you live for the longest time in a year .

It is important to have updated registration, as it is necessary to carry out procedures such as school registration or request various types of aid . In addition, the right to vote can only be exercised in the locality where it is registered. Even in some procedures the registry expires and you must request a version less than 6 months old.

Remember also that, in case of change of address, you have the obligation to inform . The procedure is simple: go to the registry office of your new residence, fill out an application and prove that this is your new residence, either with the rental contract or with the deed of the house. This is the usual procedure, but some municipalities may request other documentation.

As you have seen, how to know where you are registered is simple, as is modifying the data. It is a procedure that should be updated and updated. Although you can be registered in one place and live in another , it will be more practical for you to be registered in the town where you reside.