credit agreements
• Types of credit agreements.
• Structure of credit agreement.
Credit agreements are legal documents that detail the terms and
conditions of the business relationship that exists between a lender
and a client. Agreements of this type are used whenever a bank
extends a loan, a credit card provider authorizes the issuance of a
credit card to a new customer, and even when a financial institution
establishes a line of credit that the customer can draw upon when
and as needed.
The provisions found within a credit agreement address specifics such
as the terms of repayment(срок выплаты), and the amount and type
of interest applied(относительно) to the outstanding balance. A
credit agreement will also provide information regarding the steps
each party may take in the event that the other party fails to meet
the commitments identified in the text of the document.
There are several factors that go into determining what information is
addressed in a particular credit agreement. In some cases, the type
of credit extended will be key to the overall structure of the contract.
• There are many different forms of credit:
• Overdrafts
• Personal loans (from banks or building societies)
• Hire purchase
• Credit sale agreements
• An overdraft is a way of borrowing on your bank account. Overdrafts
are given on your current account so that when your balance is 0 in
your account you can still spend up to a certain limit. It is suitable if
you have short-term cash problems and for spreading out the costs
of expensive events such as holidays.
• Personal loans
• Banks and building societies offer personal loans to
customers. These loans are suitable for medium and
longer term needs, for example, a car loan or a loan
for home improvements. Generally, you pay a fixed
amount back every month. If your loan is a variable
rate loan you may be able to pay more than this
back when you have it. This allows you to pay off
the loan sooner. It is not advisable to take out a
personal loan to cover day-to-day expenses.
• Hire purchase ( Покупка в рассрочку)
• These are hire agreements offered by shops so that
you can hire and eventually buy particular items.
Items bought on HP are normally expensive items
such as a car or furniture or electronic equipment.
You do not own the item until the last
instalment(рассрочку) of the loan is paid. Be sure
that you can pay off this final amount before you
take up this finance. Hire purchase finance is not
flexible
• Credit sale agreements
• These agreements are similar to hire purchase agreements in that an
item is purchased and paid for in instalments(в рассрочку). Like hire
purchase loans this type of credit is not flexible.
• Owner Agreements
• When starting a business, it doesn’t matter if you
are a corporation, LLC, or partnership. If you are in
business with another person, you need a written
agreement with all co-owners. These can be:
• • Operating agreement
• Shareholders’ agreement
• Founders’ agreement
• Partnership agreement
• An operating agreement is an agreement among limited liability
company ("LLC") This includes capital accounts, membership interest,
distributions of profit and allocated tax responsibility, just to name a
few. This internal document is an agreement set by the company
members that contains provisions for critical items and rules that run
the company. Operating agreements can be amended at any time by
the company members or managers.
• A shareholders' agreement (sometimes referred to
in the U.S. as a stockholders' agreement) is an
agreement amongst the shareholders of a company.
• In strict legal theory, the relationships amongst the
shareholders and those between the shareholders
and the company are regulated by
the constitutional documents of the companya
company's constitutional documents are normally
available for public inspection, whereas the terms
of a shareholders' agreement, as a private
law contract, are normally confidential between the
parties.
• Customer and Vendor/Supplier Agreements
When starting and growing a business, customers are the all-important
source of revenue, with the vendors and suppliers used to fulfill
customer demand next in line. Every time you make a sale, you have
contracted with your customer, and that contract needs to be
designed to help frame the relationship with them and provide all
parties with the legal protections.
• Customer and Vendor/Supplier Agreements
When starting and growing a business, customers are the allimportant source of revenue, with the vendors and suppliers used to
fulfill customer demand next in line. Every time you make a sale, you
have contracted with your customer, and that contract needs to be
designed to help frame the relationship with them and provide all
parties with the legal protections bargained for.