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How do Companies Raise Lines of Credit?

In current times, finding credit – through your bank or not, is becoming increasingly harder. The global pandemic, as well as change of legislation as a result of Brexit is adding to reasons why credit might not be so readily available. However, there is a way through and a facility which could help your business raise credit… 

Demand Bank Guarantees 

How can a Demand Bank Guarantee raise a credit line? Firstly, it is governed by ICC Uniform Rules for Demand Guarantees, (URDG 758) and secondly, it contains specific verbiage solely for monetisation purposes.  

A Demand Bank Guarantee is specifically used to raise loans and lines of credit. It is recognised by lenders as top-rated collateral. As banks have reduced their loan books, companies have sought out the Demand Bank Guarantee. It has become the financial instrument of choice when seeking credit lines. 

Today many companies are leasing Demand Bank Guarantees. The credit lines obtained have saved many of them from bankruptcy. So, how to lease a Demand Bank Guarantee? 

Leasing Demand Bank Guarantees 

Companies that lease Demand Bank Guarantees are referred to as “Providers”. They will lease a Demand Bank Guarantee to another company. This company is referred to as the “Beneficiary” and the beneficiary will pay the provider a fee for leasing the Demand Bank Guarantee.  

The beneficiary can take the Demand Bank Guarantee and offer it to their bank as collateral. The bank will use the collateral to offer a loan or line of credit to the beneficiary. Companies all over the world are raising finance through the Demand Bank Guarantee. 

Who Provides Access to Providers? 

Access to Providers is supplied by IntaCapital Swiss – a boutique finance company with over a decade of experience in this arena. They have a large database of Providers who aid their most popular product, the Collateral Transfer Facility. This allows the provider to lease Demand Bank Guarantees to company’s seeking credit lines. 

Sometimes banks do not lend against Demand Bank Guarantees. As advised previously the return is too small. However, IntaCapital Swiss can supply third-party lenders to replace the banks. Their database of third-party lenders is extensive.  

In short, IntaCapital Swiss can supply the Provider, the Demand Bank Guarantee and a lender. So please, if you are looking to raise credit for your business, learn more about Demand Bank Guarantees and get in touch with us. 

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