Companies can use different types of loans for the repayment period. One of the types of loans are short-term loans, which include Quick loans. Such loans are granted when the company has an urgent need to obtain additional funds.
Quick loans are loans granted against collateral or collateral. Quick loans are secured by various types of movables. The applied collateral includes, among others, securities, precious metals, property rights and easily transferable movables. By acquiring a Quick loan, the subject of the pledge is transferred to the banks. It is a way to secure the risk related to the lack of repayment of the financial liability by the borrower. Then the bank has the right to sell its pledge in the form of movables.
One of the features of the Quick loan is the high interest rate. This results, among others, from the short-term nature of such a commitment and also from simplified procedures when granting Quick loans, which is also the result of an urgent need to raise cash by entrepreneurs. At the same time, with Quick loans interest is collected in advance. They are deducted from the loan amount paid to the borrower. In addition, with Quick loans you have to reckon with the fact that the value of the pledge that secures the loan very often exceeds the amount of debt. This is due, among other things, to the fact that banks provide such loans at high risk. The high amount of loan collateral is aimed at increasing the probability of repayment of the liability in the time set by the bank.
Deciding on Quick loans must also take into account the need to incur additional costs. This applies, inter alia, to the costs related to the valuation of pledge items. At the same time, the valuation is necessary for the appraiser chosen by the bank, which is also more costly than for the independent appraiser.
Types and features of the Quick loan
Quick loans are granted in two forms. First of all, these are loans granted by commercial banks. Such loans can be incurred by both legal and physical persons. Secondly, Quick loans are also granted by central banks. Such loans are granted to commercial banks that are in a difficult financial situation. Such loans are also granted for short periods of time. Most often the time of granting the loan does not exceed a few weeks. Pledges are also used for such loans, which are the movables of the bank in the form of, inter alia, government bonds, bills of exchange, vouchers, which are owned by a given commercial bank. Quick loans allow you to provide support for those banks that face liquidity problems in the area of payments. This allows reducing the risk associated with bankruptcies of commercial banks due to short-term problems with current access to the appropriate amount of funds.
- Types of Quick loan
- features of the Quick loan
- Quick credit conditions