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Professional cash loan

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Professional cash loan

Professional cash flow credit is divided into three main families. It is used by all, or almost all, companies.

What is cash flow credit for professionals?

Cash credit is a type of short-term professional credit that is used to finance one-off or recurring cash flow needs for companies. It is granted by banks by signed contract or by simple verbal agreement. It allows the company to have its debit account for a limited period.

Banks do not usually require a guarantee for cash flow credit, however, they do not grant it to all companies. It is often necessary to prove good management of the company’s accounts despite the cash flow gaps it may suffer.

Cash facility

The overdraft facility is a very common cash flow solution. It consists of authorizing the company to debit its account for a few days. This is a solution where the company must therefore put its account back in positive as quickly as possible. The overdraft facility is often not the result of a contract but simply of an agreement between the bank and the company, so it is important to maintain a good relationship with your banker. This cash flow solution often coincides with the payment of receivables at the time when the company must pay salaries or social security contributions, for example.

The cash facility solution has a high cost for the company.

Bank Overdraft

The bank overdraft consists of putting the company’s account in debit for several days or weeks. It is authorized for an indefinite period and stipulated in a contract with the bank. The bank overdraft can be very useful when the company has an immediate cash need and is expecting a future inflow of money. It is essential for companies to obtain authorization for a bank overdraft with their partner banks and to negotiate the rate to deal with possible incidents.

The bank overdraft solution is less expensive than the overdraft facility but also requires the payment of bank charges.

Campaign credit

The campaign credit is granted to companies whose activity is seasonal. These are companies working only during the Christmas period or only in the summer. The campaign credit runs for one year and allows an overdraft of several months. Banks take a higher risk with this type of credit because if the season is missed, the company will not be able to repay its overdraft. Credit institutions with campaign credits therefore require stable financial liabilities from the company.

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