Financial tools applied in Venezuela. promissory notes and credits 2002

Summary of the financial tools applied in Venezuela (promissory notes - line of credit - automotive credit)

This work focuses on defining, describing and explaining the use of these three different tools (PAGARÉS - LINEA DE CRÉDITO - AUTOMOTIVE CREDIT) in Venezuela. It also sets out the different requirements that a company must present to carry out any of these financial tools.

This work was carried out by 9th semester students of administrative sciences at the Metropolitan University in Caracas, Venezuela during the month of July 2002 to be reviewed by Professor Francisco Sanabria in the subject of Finance II

2. Introduction of the promissory note

The promissory note constitutes one of the credit documents that become part of the balance sheet of the Receivables or payables, depending on the transaction made.

In this investigation, the definition of each one is presented, as well as the people who intervene in them, at the time of making the transaction and when they are sent for collection or discount, as the case may be.

In modern times, this type of credit instrument has become an important tool for commercial transactions, since they are contemplated in the Commercial Code, which makes it possible to collect them.

For the preparation of this research, various sources of information were analyzed, which allowed its development in the clearest and most concise way possible. Examples that contribute to its understanding are also presented.

Promissory notes

The Promissory Note is an unconditional promise in writing made by one person to another, signed by the person who makes it, promising to pay at sight or at a fixed or determinable future date a certain amount of money, to the order or to the bearer.

The promissory note as a negotiable document is a title with a certain value and every time you issue a promissory note the only thing you create is a new obligation with specific prescriptive terms. For procedural purposes, a (line) contract and a promissory note are perfectly individualized executive titles and each one demonstrates a specific obligation. So if you have a past due note with a certain amount that can be demanded, you can enforce it perfectly in court; Likewise, if you have a line contract, it is only enough to determine the amount owed so that the document has executive force.

The promissory notes are always nominal, bearer notes are not accepted. So there is no stamped model, nor does it need to comply with any specific model. Just indicating the obligation to pay a person or entity on a date an amount is enough to be valid.

It must be remembered that an obligation to be enforceable must be overdue if the maturity of the promissory note is one year only after the end of the year it will be enforceable, unless there is a clause that justifies the early maturity of the obligation.

The payments or vouchers between merchants or for acts of commerce on the part of the obligor must contain:

Date Amount in number and letters The time of your payment The person to whom or whose order should be paid The expression if they are for a value received Account Value.

The lack of one of these requirements results in the document not being considered payable, except:

The Note whose maturity is not indicated will be considered payable on demand. The Note that does not indicate the place of its issue, will be considered signed in the place that appears next to the name of the signatory.

What are the minimum requirements that a promissory note contains?

The recommended minimum requirements are as follows:

Identification of the obligor. Unilateral declaration of payment (I must and will pay). Indication of the person or to whose order it must be paid. Indication of the expressions "to order" (That the letter can be negotiated) and "without notice and without protest" (that the payment requirement is not subject to the fulfillment of any procedure) Expiration date. Amount of the credit expressed in letters and in number, if they differ, the amount expressed in letters will prevail. Identification of the interest rate to be charged. Place and date of issuance Signature of the obligor.

Usually in the promissory note two people intervene: The subscriber who is the person who signs the document with the promise to pay it and the beneficiary who is the person to whom the document must be paid.

Payment examples

General example:

PAYMENT NUMBER …………… ORDER ……. EXPIRES:… /../..

………………. On the day ……………….. I will pay WITHOUT PROTEST (Art. 50 - D.LEY 5965/63), …………………………………… or at your command the amount of ………… ……………….., for the same value received in ……………………. To my complete satisfaction, payable at home …………………………………………………

Promissory note issued by a Mexican company:

Good for

Place and Date of Issuance

Number of a series in total

I owe and will pay unconditionally, without pretext, this I will pay where the holder chooses on the due date, at the order of Ómicron de México, SA de CV , the day

the amount of value received to my satisfaction. This promissory note is part of a numbered series from to and all are subject to the condition that if any of them are not paid when they are due, those that follow in number will be required, in addition to those already expired, according to article 79 of the General Law of Securities and Credit Operations, will cause default interest of 10% for each month or fraction, payable together with the principal, such interests will be caused on the unpaid capital in accordance with the provisions of article 152 of the General Law of Securities and Credit Operations.

Debtor:

Address:

Population:

Telephone:

firm: ________________________________________

Endorsement:

Address:

Population:

Telephone:

firm: ___________________________

People involved in the promissory note

Drawer: is the one who agrees to pay the sum of money, at sight or at a fixed or determinable future date. The beneficiary or holder: is the one at whose order the payment of the sum of money stipulated in the promissory note must be made. guarantor or guarantor: the person who guarantees the payment of the promissory note.

Legal part of a promissory note

Below are some articles of the Venezuelan Commercial Code, which refer to the promissory note:

Art. 486: “The promissory notes or vouchers between merchants or by acts of commerce on the part of the obligor must contain: the date, the quantity in number and letters, the time of their payment, the person to whom or to whose order it must be paid, the expression whether they are by value received and in what species or by account value ”.

Art. 487: “The promissory notes are applicable to the order, to which the previous article refers, the provisions regarding the bill of exchange on: the terms in which they are due; the endorsement; the terms for the presentation, collection or protest; the endorsement; the pay; payment for intervention; the protest the prescription".

As can be seen, Article 487 of the CC clearly specifies that the promissory note in some of its aspects is a document very similar to the bill of exchange.

Art. 488: “The bearer of a promissory note protested for non-payment has the right to charge those responsible: the value of the obligation; the interests from the date of the protest; the expenses of the protest; their interests from the lawsuit; the legal expenses that would have been disbursed ”.

A promissory note is a document payable to the drawer and a document receivable to the holder, in due course.

Class Or Type Of Note

I will pay referring to the terms, terms or ways in which, according to the law, these documents can be extended. In effect, the promissory note can be extended: at sight, to a period counted from its date or to a certain fixed day. Promissory note at sight: it is the one that must be paid at the time of its presentation. It is recognized because it carries the clause at sight, or because it does not indicate an expiration date. I will pay within a period of its date: It is the one in which the term begins to count from the date of its issue, is characterized by carrying the formula to (60), (90), (120) etc… I will pay days, or another similar one. I will pay on a fixed and determined day: It is the one that indicates the precise day on which it must be paid, is identified by the phrase "at (5), (6), (7) October 19 …… I will pay. Mortgage Payments:

When loans are obtained or properties are acquired and real estate or other items of assets are given as payment guarantees, two documents are put into circulation:

A promissory note, which constitutes evidence that the debtor's staff was forced to pay the loan, a mortgage that constitutes evidence that the obligation is guaranteed by a specific property. A mortgage represents a conditional deed that transfers a conditional title to the mortgagee; however, the legal instrument stipulates that it will be null and void if the mortgage debtor pays the loan at maturity. In reality, the mortgage imposes a condition on the property to guarantee the payment of the obligation at maturity.

It is customary to record the obligation as a mortgage note when only the operation is covered by a single document.

· Financial note:

Title of credit issued by financial factoring or financial leasing companies, whose purpose is to obtain financing that supports their operation in the medium term, so that their term can be between one and three years, which are guaranteed either in a unsecured or fiduciary manner. and that they pay a performance based on a reference rate, plus a differential prize.

· Medium-term notes

It is a collective credit title, issued by a commercial company, whose destination is the financing of medium-term projects, that is, from one to three years, with a guarantee that can be unsecured or fiduciary and whose returns are payable monthly or quarterly, based on a reference interest rate, plus a differential premium.

Endorsable Promissory Note:

It is a promissory note that includes the endorsement clause, so that it can be transmitted to another person.

I will pay Stock Market:

Bank title issued by credit institutions authorized by the Bank, whose interest is paid when due by the issuing institution. Its performance is given based on the differential between the placement or purchase price and its amortization price.

The Stock Promissory Note differs in terms of its physical presentation with the traditional Note, since it has been designed with the purpose of having an agile trading instrument and acceptance in the stock market. However, this does not mean that it loses its status as a security, nor does it weaken its executive power in the event of a lawsuit. The Promissory Note must be issued "to order", which makes it a negotiable and transferable title by endorsement and delivery of the same.

The money from the investments made in said securities is used by the issuing companies to cover short-term financing needs. The returns that can be obtained in these operations depend on the type of company, its degree of solvency, and the liquidity conditions of the market.

I will pay with Exchange Coverage:

The Exchange Hedged Note is a security indexed at an exchange rate, which allows the holder to maintain the original value of their investment in the face of fluctuations in our currency. The title is denominated in USS. Dollars, but the commitment to pay principal and interest is in national currency.

At the date of the promissory note subscription, the issuer and the investor agree to a specific exchange rate.

This instrument was widely used in the past when the laws only allowed to pay obligations in national currency. However, it lost its popularity with the reform made to the Monetary Law in October 1994, from which the Financial System and the Stock Exchanges are authorized to document in foreign currency debts contracted through them. Currently there is no movement in this instrument, although there is no obstacle to it.

The Promissory Note with Exchange Coverage is an unnamed security, that is, a title created by custom, banking and commercial uses.

Multiple Payment or Macro Title:

The Multiple Note or Macrotitle is an instrument that originates as a representative document of titles issued by an issuing company. This mechanism allows the participation of one or more investors in said instrument, through non-negotiable Certificates of Custody. Units are documented by means of accounting entries.

The Issuer will deliver the Multiple Note or Macro-Title to the Stock Exchange, through its Stock Exchange. In its capacity as depositary, it will be the Central de Valores that will be in charge of administering this document and the participations derived from it.

This is an unnamed security title, that is, a title created by custom, banking and commercial uses.

Currently, the Multiple Note or Macro Title can only be traded on the Central American Stock Exchange.

Commercial role:

It is a type of unsecured promissory note, issued by large and strong companies, that is sold mainly to other businesses, insurance companies, pension funds, money market mutual funds and banks.

The use of commercial paper is restricted to a small number of companies that represent exceptionally small credit risks. Traders prefer to manage the commercial paper of companies whose stockholders' equity is relatively large. A potential problem with commercial paper is that a debtor with temporary financial difficulties may receive little help, because traders with commercial paper are considered less personal than bank relationships. So banks are generally more capable and more willing to help a good client in a temporary storm than commercial paper traders.

On the other hand, it allows a corporation to explore broader sources of credit, which helps reduce interest costs.

Generally this type of promissory note is issued for high amounts (example of this could be mentioned $ 100,000 or more). Which is why very few people can afford to invest directly in the commercial paper market.

The commercial paper issues a certificate to the lender to indicate that the rights on it will be canceled. In cases where the certificate is lost or deteriorated, someone could convert it into cash upon expiration.

Euro Commercial Paper:

Also known as Euro PC, this is similar to a commercial paper, with the difference that it is a short-term debt instrument issued by corporations, with typical maturities of one to six months. In this type of promissory note there is not as much interest for the credit quality of the issuers of the Euro PC.

Euro promissory notes:

They represent medium-term debts, normally have maturities of one to ten years. They are very similar to those of longer-term debt instruments such as bonds. The amount is mainly repaid at maturity and interest is paid quarterly.

Treasury Notes:

They are short-term obligations that the federal government acquires. They are a popular resource for accommodating funds, due to the existence of a large and active market.

Treasury notes are characterized in that they are traded on a discount basis, the return received is the result of the difference between the price paid and the maturity value.

Business Payments:

It is a type of paper that is sold to industrial companies, utility companies or financial companies too small to have their own sales network.

Promissory Note Conclusion

The Promissory Note is a very important credit document to carry out legal transactions in any country. In Venezuela, these transactions have their legal basis in the Current Commercial Code, where everything related to them is stipulated.

This credit document is of great importance since they form a guarantee of recovery of the value of the provision of a service or the sale of some property, whether it is movable or immovable; since through its issuance, the borrower can resort to established legal sources, as already stated in the Commercial Code, to make their payment effective.

The credit agreement.

Active operations are those by which the bank or financial institution places the resources it obtains in its intermediation operations, its own resources, some differ within these credit operations from the investment, through which the institution places the resources that it obtains in public or private titles. The active operation par excellence is the credit, loan or mutual agreement. If we define the credit agreement in a broad sense, as any operation in which the bank places financial resources in exchange for the obligation of the recipient to return them, in a certain time or not, with the payment of a consideration by the use of that money, we can see that all active operations carried out by financial institutions fall within this concept,with variations regarding the type of guarantee, whether or not the ownership of the assets that guarantee the operation is transferred, etc. According to the general law of banks and or financial institutions, according to article 189 considers the following:

“Article 189. For the purposes of this decree of law, it is considered as:

Credit: financial leasing operations, invoice discounts, loans, letters of credit, discounts, advances, guarantees and any other financing modalities or active operations carried out by banks, savings and loan entities or other financial institutions. Consumer credits: short-term revolving financing, carried out by banks, savings and loan entities, and other financial institutions, granted by any means to individuals, to carry out direct purchase transactions in commercial establishments or payment of services, inside and outside the national territory, up to the amount of seven thousand tax units (7,500 UT), and whose amount is recoverable through the payment of consecutive installments. They are included within this type of credits,operations carried out through the credit card system or any computer, magnetic or telephone means, by natural or legal persons.

In any case, the superintendency of banks and other financial institutions, through general prudential regulations, may modify the parameters to classify the credits as short, medium and long term. ”

The law of Banks and other financial institutions interprets that credit and active operation can be equivalent terms, although it only grants this broad definition of the word credit in addition to limitations and sanctions.

The credit agreement has been defined as:

The contract by which a person, the mutual, the bank, delivers to the client, a certain amount of money with the obligation for the latter to return the amount in the agreed time, recognizing the interest as consideration for the delivery. It is characterized by being a real, onerous, commutative and main contract. The credit agreement has many modalities, and can be classified as follows:

Lapse of time:

Firstly, due to the period of time, which is the one contemplated in article 189 of the law on banks and other financial institutions, the following is stated in the following paragraphs:

"Short-term credits: are those whose validity will not exceed the term of three (3) years. Medium-term credits: are those whose validity exceeds the term of three (3) years without exceeding five (5) years. Credits to long term: they are those with a validity of more than five (5) years.

These are the most used parameters without regard to time, but in reality they do not modify any of the other characteristics of the contract.

By Destination:

Consumer loans, Personal loans, Industrial loans, Agricultural loans, Commercial loans, Small and medium industry loans.

The law of banks and other financial institutions does not establish this classification, but it does give us a definition in article 189, numeral two (2) of what is consumer credit:

Consumer loans: short-term revolving financing, carried out by banks, savings and loan entities, and other financial institutions, granted by any means to individuals, to carry out direct purchase transactions in commercial establishments or payment of services, within and outside the national territory, up to the amount of seven thousand tax units (7,500 UT), and the amount of which is recoverable through the payment of consecutive installments. through the credit card system or any computer, magnetic or telephone means, by natural or legal persons.

As we can see, these types of credits are those that are characterized by being the most common due to the fact that their destination is based on the operations of purchasing products or paying for services.

By the way of being instrumented:

Documented credit Overdraft Current account credit Rotating credit Documented credit in securities.

The documented credit is typical, this is the financial institution that grants the loan and in exchange the debtor signs a document that contains all the characteristics of the loan.

The overdraft implies a credit concession not demanded, formally, but concomitant with the provision of the check issued by the holder of a current account, knowing that it has no fund and the bank's decision to pay it by charging it to the account of the eminent.

The current account credit is one in which the use of credits is made through the current account held by the borrower at the respective financial institution.

The revolving credit is one in which the bank opens a line of credit to the client, who can use it up to a certain amount, so that the client, as he repays the amounts received, has the right to request them again on loan. Non-revolving credit, on the other hand, is one in which the client, after having used and canceled, must make a new request for credit if he wants a loan. Revolving lines of credit are granted for an indefinite period and the use of the line can be instrumented through promissory notes or bills of exchange or through the current account.

Documented credits without promissory notes or bills of exchange. The latter are also known as bank acceptances. In some cases the loan is documented in a notarized and registered instrument and a security is issued in parallel, which allows the bank to use it for the discount or rediscount at the Central Bank of Venezuela.

For the guarantee.

Unsecured loans are those that do not have a specific guarantee without the debtor responding to them with all their assets. Guaranteed credits, which are subdivided respectively into real credits and personal guarantees.

b.1) Real Guarantees.

Home equity loans. They are those in which the payment and the loan repayment is guaranteed with a mortgage on a personal property. Some distinguish between mortgage-backed loans and mortgage loans, being that they define the latter as those for which the purpose of the loan is the acquisition, construction and improvement of the property that serves as the borrower's main residence. Real estate mortgage loans. They are those in which the guarantee is a mortgage on the personal property syndicated in the Law of Transferable Mortgage and Pledge without Possession Displacement. Loans with pledge guarantee. They are those whose payment or return is guaranteed with pledges on real estate, such as securities, raw materials, etc.This classification includes loans with pledges on assets without displacement of possession.

b.2) Personal guarantees

They are the credits guaranteed by a third party through the figure of the bond or the guarantee.

The bond is the contract by which a person called a guarantor is obligated in front of the creditor to fulfill the obligation of the debtor, if the latter does not satisfy it.

The guarantee is a similar figure, but it is used in the case of the securities. The Commercial Code defines it as the exchange legal act through which the payment of a bill of exchange is guaranteed. The differences between both figures are multiple, among the main ones we can highlight the following: The guarantee is autonomous, that is, the guarantor assumes the obligation to pay the bill of exchange, while the guarantor is obliged to turn off in the event that the debtor don't comply. The enforceability of the letter of guarantee of the guarantor does not depend on the fact that the debtor has flooded to comply. The guarantee is documented in the same bill of exchange; The guarantee, on the contrary, can be given in the same document of the credit that guarantees or in a separate instrument. The endorsement summarizes, by the sun affirm stamp on the obverse, provided that it is not that of the drawee,nor that of the drawer. The guarantor can oppose the exceptions that the debtor had against the creditor and the guarantor no.

Today, there are diversities of credits that are offered by the different financial institutions in the country. These are offered in different ways in order to attract customers, among those credits are:

Super Payroll Line of Credit; Alternative of revolving credit associated with the Global Interest Current Account, which allows covering eventualities of funds financed for up to 12 months, to make purchases or cover unforeseen cash.

Advantage

Approval in 3 days. Speed of service. Immediate availability of the amount granted. Interest generated on a daily basis and collected monthly. Financing up to 12 months. Pay interest only for the amount used.

Requirements

Have the payroll domiciled in the Banco de Venezuela. Monthly income greater than Bs. 1 MM. Not have a bad experience in the Bank or in the Financial System. At least 1 year in the company.

Advantage:

The client chooses the moment and the way to have the credit. Automatic renewal. Quick processing of the request. They can be requested in any of our Agencies or from your Business Executive.

Characteristics:

Every year, each client is evaluated to increase or ratify their line of credit. Speed in obtaining sufficient resources for their usefulness. Variety in the use of authorized credit. Fill out a Credit Application.

Requirements:

Commercial registry establishing and amending General balance and audited profit and loss statement Verification balance if six (6) months have elapsed after the last fiscal year Assembly with capital increase, current and shareholder composition Copy of the RIF Board of Directors certification authorizing operation

Benefits

The client chooses the time and the way to dispose of the credit. As he cancels the amount used, he will have availability on it. Automatic renewal. Payment facilities through monthly, bimonthly or quarterly installments with amortization of capital and payment of interest adjusted to the client's ability to pay. Possibility of making special money orders. Quick processing of the request. They can be requested at any Banco Sofitasa agency.

Characteristics:

Documented agreement where the Bank guarantees the client to transfer up to a certain limit of money. Interest is calculated at the market rate. It is granted with a mortgage guarantee. Directed to individuals and legal entities.

There is the “LíneaComercio Bancaribe”, which is a line of credit to finance inventory or other working capital needs.

Minimum amount to approve:

For the credit line, the minimum amount to be approved is Bs. 8,000,000. For associated operations, the minimum is Bs. 1,500,000.

Bancaribe Commerce Line Features:

Financing granted through a revolving line of credit, with associated operations backed by a specific document for LíneaComercio Bancaribe.

Aimed at legal entities.

Financing Term:

Line of credit up to one year with an extendable term. Operations associated with the line of credit may be canceled at 3.6, or 12 months. Payment method: monthly and consecutive installments of principal and interest, where the portion of principal will be Fixed. Advance monthly interest payment. Guarantees to the satisfaction of the Bank. After the payment of the first three installments in a timely manner, the client may use the available amount of the line of credit, to date. The line of credit may be extended even longer term if the client has punctually paid his installments.

Attractive to the Client:

Revolving line of credit.

The client administers LíneaComercio Bancaribe according to their needs, using their available balance whenever they need it, as long as they make monthly payments on time.

The client establishes the monthly payment date, each time he uses his Bancaribe Business Line.

Requirements:

For the initial line of credit: Credit application duly signed. Active and Passive position updated. ARE for companies requesting risk equal to or greater than Bs. 15,000,000. Document of incorporation and modifications. Mercantile Registry of the constitutive act and modification of statutes where indicate the Board of Directors in force (photocopy). Financial Statements of the last three (3) accounting closings, with a cut-off of not more than three months of issue. Projected cash flow for the period of the credit line. Photocopy of the certificates of identity of the people involved in the operation.Certification of the minutes of the Board of Directors, authorizing the operation and / or the person representing the company (as required by the statutes).Copy of the Tax Information Registry (RIF).Three last ISLR statementsFor the disbursements of the operations associated with the line: Credit request. Loan document LíneaComercio Bancaribe.

For this financial institution, there are two types of commercial accounts that provide this service, therefore there are two categories of lines of credit.

Classic Checking Credit

Recommended for individuals who require a credit instrument to cover deficits in their daily cash flows.

Amount and Benefits:

Current Account with the capacity to draw on funds not available up to the authorized amount. Interest charged at the end of each month, calculated on daily balances at the current rate of the day. Amount determined by the Bank's Steering Committee based on the debt capacity the client's.

Main features:

Reviewable annually.Unlimited term.The Bank reserves the right to cancel at any time.

Access modalities:

Mobilization of the account by checks and Superefective Card accepted in Visa stores worldwide. Access to the networks Supercajero, SUICHE 7B, Conexus and Visa in Venezuela, Visa / Plus abroad. Transfer between accounts, balance inquiry, movement consultation, and payment of public services by phone. Transfer between accounts, balance and movement consultation through Venezuelan Online.

Opening requirements:

Have a Checking Account in the BVC. Fill out and sign the credit profile. Present updated personal Balance signed by a Public Accountant (Maximum 6 months of validity). Work certificate or certificate of admission (Maximum 3 months of validity). References Banking and Commercial Valid.Copy of the Identity Card of the applicant and his spouse, RIF.Copy power of the spouse (if it has it).Last income tax declaration.Sign notarized contract, if granted.May require guarantee for your Granting. How to avoid additional charges: Current Account Balance greater than Bs. 300,000, or For assistance, contact: Management of the Closest Agency. Telephone Attention Center.

In addition to this system of lines of credit, there is another type of account that has this service, but it is a currency exchange account.

Crediefectivo

Recommended for individuals who do not wish to resort to selling their savings in dollars to cover temporary cash deficits in bolivars.

Benefits:

Quick access to their funds in Bolívares. The deposit in dollars accrues interest, at an interest rate proportional to the amount. The client receives the Superefectiva Gold Card, which allows:
1. Make payments for goods and services in businesses affiliated to the Visa Network, worldwide. Access to the Supercajero, Suiche 7B, Conexus, Visa in Venezuela and Visa / Plus networks abroad. Cash withdrawals at ATMs (Supercajero) until for Bs. 300,000.Mobilization of the account by checks and Superefectiva card. The credit is activated 7 days after the required payments by the Bank are delivered. Savings of commissions on the foreign currency purchase operations made to replace the dollars when they were sold in the past.

Main features:

It is a Current Account Credit guaranteed with a dollar deposit in BVC Cayman Branch. Ideal for individuals who receive their salary income in dollars or mixed (Bs. + US $). The amount of the credit corresponds to 90% of the amount of the deposit (minimum US $ 5,000). The interest rate is variable and preferential. Interest is calculated daily, in bolivars on negative account balances. Interest charges are made at the end of the month and can be capitalized to the debit balance. If the client uses the total amount of the credit and it is considered to be past due, the Bank reserves the right to cancel the credit with the deposit funds in dollars, given as collateral. A single credit may be granted by current account that the client has.In case of Supercheque current account,First, it will be turned on the funds available in the current account, then on the funds in the Savings Account, Daily Balance and, if necessary, on the available credit in the Current Account.

Requirements for the application:

Maintain / open a Classic, Optima or Super Checking Account at the Bank. Sign the documents for account opening at the Cayman Branch. Cover the initial opening deposit at the Cayman Branch (minimum US $ 5,000.00). Submit a letter of request. credit and personal balance. For assistance, contact: Management of the Closest Agency. Call Center.

In the case of the current account credit line, it is 12-month revolving, associated with a Corp Banking Current Account, so you can enjoy an additional balance to that existing in the current account, all managed with the same checkbook.

With the Checking Line of Credit, you will enjoy:

Flexibility to make the payment of any consumption by check, allowing you access to the Points of Sale of the Maestro Network, domicile your payments, make transfers and payments of services Financing at the best rate in the market Exemption of the minimum amount of opening of your associated Current Account to the Line of Credit, as well as fees for account maintenance during the first 3 months

Collections:

Complete the product application form, as applicable, in any of our agencies Original proforma invoice issued by the concessionaire, in the case of a Mobile Corp One (1) legible photocopy of the applicant's laminated IC and of the spouse in case of being married. If the marital status indicated in the application is different from that presented in the identity card, you must attach legal documentation that proves it. (Divorced: divorce decree / widower: death certificate or successor declaration) Work certificate in original, on letterhead indicating monthly or annual income, position held, seniority, and company signature and seal, with a maximum validity of three (3) months. (Dependent worker) Original Income Certification signed and stamped by Certified Public Accountant (CPC),indicating the profession and activity that it carries out, with a maximum validity of three (3) months. (Independent Worker) Photocopy of the last three (3) current account statements in case of not having this product with the Bank. Photocopy of the last three (3) account statements of at least one credit card in case of not having MasterCardâ Visaâ Corp Banca and / or American Express. Photocopy of the last income tax declaration. In case of not declaring tax, attach original form of "Proof of Non-Presentation of the ISLR Declaration" In case of being a worker with additional activity: justify the additional income, through a proof of income or income certification signed and stamped by a Certified Public Accountant (CPC).In case of having credits with Corp Banca,for an amount greater than 20 Million Bolivars and without special guarantee: attach original Personal Balance, signed and sealed by a Certified Public Accountant (CPC), with a maximum validity of six (6) months.

In the case of a customer and / or guarantor with a business order, you must attach:

Mercantile Registry (statutes) duly registered and published and any modification, if applicable. Photocopy of the laminated identity card of the persons who bind the legal person. Three (3) last current account statements of the company. and losses of the last two (2) years Income tax declaration of the last two (2) years, indicating the number of the RIF In case of requiring guarantor, this must attach the same documentation required to the applicant

Among the Credit alternatives offered by this financial institution through the "CitiGold Account", there is a convenient special Line of Credit, which, in addition to providing the necessary funds to make any purchase or payment, provides unique benefits and maximum comfort in handling.

Your Special Line of Credit provides:

Extensive financing of up to 6 months. Payment of comfortable minimum monthly installments. Revolving credit that allows you to re-use the canceled amounts of capital. Competitive Interest Rates. Customized checkbook fines that distinguish you as a CitiGold customer, completely free. Checking Request through our exclusive personalized delivery service, just by contacting Citiphone Banking. Countless benefits that can only be obtained by paying in cash, since your checks are conformable, 24 hours a day, 365 days a day. year. Fine leather checkbook holder, completely free. A monthly account statement from your CitiGold Account, which details the balances of your Special Line of Credit, the summary of balances and movements and the transactions carried out day by day.It will also have information on the checks issued and the rates applied in the period.

With the Guaranteed Line of Credit you can enjoy:

Extensive financing of up to 36 months, to pay off the capital. Monthly interest payment, without the need to amortize capital. Total or partial release of the amounts in guarantee, at any time and at no cost. Competitive interest rates. Revolving credit that allows you use the canceled capital amounts again. Customized fine checkbooks that distinguish you as a CitiGold customer, completely free. Checkbook application through our exclusive personalized delivery service, just by contacting Citiphone Banking. Unlimited check issuance, at no cost. Countless benefits that are only obtained by paying in cash, since your checks are compliant, 24 hours a day, 365 days a year. Fine leather checkbook, completely free. A monthly account statement from your CitiGold Account,where the balances of your Guaranteed Line of Credit, the summary of balances and movements and the transactions carried out day by day are detailed. It will also have the information of the checks written and the rates applied in it.

Automotive credit

Definition, classification and description

The Credit can be defined as the contract by which a bank or legal entity is obliged, within the quantitative and time limit agreed and through a commission, to make available to the client, and according to its requirements, sums of money or other means that allow you to get it.

According to the previous concept, then, the automotive credit could be defined as the loan granted to natural or legal persons for the acquisition of new or used vehicles for private or work use, payable in monthly and successive (normal) installments, with the option of payment of additional installments or amortization of pre-established capital at the time of granting the credit. As a guarantee, the bank or lender can request a guarantor or maintain the reservation of title to the purchased vehicle.

The automotive credit can be requested by natural or legal persons for the acquisition of new or used vehicles, family type, compact, sport, luxury, rustic, trucks, taxis, among others.

The possible modalities in Venezuela for any type of vehicle are based on a fixed fee with a variable rate, in which case the balum fee so widely criticized today is generated, or a variable rate variable fee. Some banks and dealerships offer fixed rates and fees for the first 6 months. For taxis, these credits include more attractive rates, less initial and more payment facilities.

The balum fee, which has been generated since approximately 98 and which affects those who have an automotive credit in the form of fixed fees and a variable rate, since as the fee does not vary, the change in the rate generates an amount that increases the amount of money owed. The result is that the debtor, although he has paid many installments, still owes a lot of money and has to pay for a longer time.

The conditions of the contract are established by each financing institution, according to the type of client, the requirement and the use for which the vehicle is intended. Some financial institutions do not offer loans for all types of vehicles, such as family cars.

In general, the amount to be financed by financial institutions is up to a maximum of 70% of the value of the vehicle, after studying the applicant's payment capacity. The modality can be financial leasing in some banks; and fees can be automatically charged to the account authorized by the client.

The auto loan has the general characteristics of the interest loan and whose characteristics we will mention below.

It is a medium to long-term operation, which can range from one to five years. Installments are generally monthly, but can also be negotiated and interest is charged at maturity. This type of credit is generally used to acquire real estate, or assets that, due to the volume of cash they represent, cannot be amortized with the company's cash flow in the short term.

The guarantee of this operation may be the property that is being acquired, or real guarantees other than what you are buying (pledge or mortgage). In all cases, the amount of the credit to be granted must not exceed 75% of the value of the appraisal if it is a movable or immovable asset or 90% if it is a pledge. Additionally, it can carry the bonds deemed necessary

Who offer it

Financial entities: Corp Banca, CitiBank, Provincial, Venezuela, Venezolano de Crédito, Unibanca, among others.

Users

Natural or legal persons, over 21 years of age, Venezuelans, whose income is not less than 1,000,000 Bs. And who have not less than 12 months working in the same job. In addition, automotive credit is widely recommended for those who do not have the financial resources at the time of acquisition or for those who do not want to compromise their level of liquidity.

All clients undergo a risk assessment, debt analysis and ability to pay, analysis according to the lender's target market and evaluation of documentation and collections.

General characteristics

Deadlines

Minimum 12 months Maximum 60 months

Amounts

Amount of the credit: According to the debt capacity and customer requirements. They range from approximately 10% to 70%. Flat Commission: 3% of the amount to be financed Wide coverage insurance and RCV: Financed or paid in cash. The financing company will be in charge of processing the insurance policy. In the case of financial institutions, the control of terms and coverage will be carried out through the bank's systems. The vehicle must be insured during the term of the financing. The policy must cover total or partial losses and civil liability of the vehicle (RCV). The bank will be able to finance the first year of the policy during the entire term of the credit and for the insurance of the following years the client may send the bank the renewal of the policy with one of the accepted companies;or apply to the bank for new financing for insurance. Life insurance: Applied to some banks. It can be financed the first year during the entire term of the credit, the one of the following years cannot be financed. It can be paid in cash. Policies of the client himself are not accepted. In the case of financial institutions, the control of terms and coverage will be carried out through the bank's systems.

Dues

Fixed or variable depends on the interest rate.

Interest rate: Fixed for the first 6 months and variable for the rest of the period. Modalities: Fixed rate, variable rate or variable rate, variable rate. Initial: required by some lenders in general in assembly plant financers. They range from 10% to 50%. The most common is 30%.

Guarantee

Comprehensive insurance policies, guarantors and reservation of ownership of the vehicle

Requirements

Fill out and sign the application form. Own an account, and authorize the automatic charge for the payment of the installments, and any expenses related to the loan in case of financial institutions. Pro-forma invoice issued by the concessionaire for the processing of the application and later Definitive Invoice. Updated balance, signed by a Public Accountant and Visa by the College. Proof of Income of the applicant or Certification of Income prepared by a Public Accountant.

Photocopy of the last three statements of your checking account or any other savings instrument that shows additional income.

If you exercise freely, attach:

The last three account statements of your company together with the copy of the commercial register.

Identity Card and RIF of the applicant and his spouse. Last declaration of Income Tax. Bank and Commercial References in force. Cover the minimum initial fee of 30% of the value of the vehicle.

Cases

The conditions established by different financial institutions regarding automotive loans will be mentioned below.

Corp Banca Banco Universal offers:

Fixed rate and variable rate period options according to your needs.  Terms from 12 to 50 months. Variable rate with monthly revision for the remaining months of the credit term. Fixed installments calculated for the fixed rate term and fixed installments for the term. remaining term of the credit. Flat Commission of 3% of the amount to be financed. Partial or total pre-payment of the credit without any penalty. Insurance coverage to be extended and RCV with the possibility of financing, the first year, through Corp Móvil and the following years, through a Consumer Credit of Corp Banca. Life Insurance financed, the first year, through Corp Móvil and the following years, with an advance debit in a Corp Banca Checking Account.

In addition, when requesting a credit in this institution the client will be able to obtain:

Information about the payments made by means of Debit Notes of your credit, reflected in the Account Statement of your associated Current Account. Exemption of the minimum amount of opening of your Current Account associated with the credit as well as the fees for account maintenance during the first 3 months.

The Venezuelan Credit Bank offers:

Amount to be financed up to a maximum of 70% of the value of the vehicle, after studying the applicant's ability to pay. Mode, financial leasing.

The fees will be automatically charged to the account authorized by the client.

Main Features:

Financing for new vehicles (family vehicle excluded) Maximum term up to 36 months. The total annual amount of the installments to be paid must not exceed 30% of the annual income of the applicant. Flat commission exonerated. Purchase option or Redemption Value 1% of the investment amount.

Amortization through monthly ordinary installments and / or semi-annual extraordinary installments, payable at maturity.

CitiBank offers:

- No guarantor Up to 60 months to pay From 30% of initial for vehicles zero Kilometers. No capital amortization charge. No cost for pre cancellation Insurance Financing.

5. Bibliography

Pages Consulted:

http://www.bpcr.com/Espanol/comercio.htmhttp://www. Solucioneslegales.comhttp: //www.uaq.mx/derecho/strictusensu.htmlhttp: //www.condusef.gob.mx/glosario/p.htmhttp: //www.lafacu.com/apuntes/contabilidad.htmhttp: // www.fofisa.com/contener.htm

Consulted Books:

Finney, Millar. Accounting course. Introduction Finney, Millar. Accounting course. Intermediate Finney, Millar. Accounting course. Superior Round. General and Superior Accounting Practical Course. Volume 1. Round. General and Superior Accounting Course. I take 2.Kennedy, McMullen. Financial statements. Form, Analysis and Interpretation. Besley, Brigham. Fundamentals of Financial Administration. Mcgraw Hill.Block, Hirt. Fundamentals of Financial Management. McGraw Hill.

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