How Long Can I Borrow For?

Any company wishing to enter into a Collateral Transfer Agreement, need to contact IntaCapital Swiss, Europe’s foremost boutique finance house, specialising in Collateral Transfer Agreements. A Collateral Transfer Agreement, is where one company, designated the Provider, leases or rents a Bank Guarantee, to another company, designated the Beneficiary.

For further details on the Provider, please go to “Who Are Providers And What Are Their Benefits From Leasing Bank Guarantees”.

Under the Terms and Conditions of a Collateral Transfer Agreement, a Bank Guarantee, usually has an expiry date of one year, but can be rolled over into a second and third year, up to and including seven years, providing both the Provider and the Lender agree. If the Beneficiary initially contracts for a Bank Guarantee in excess of one year, the Bank Guarantee will automatically rollover into the next year. However, if the contract has an expiry date of one year and the Beneficiary decides to rollover into year two, then IntaCapital Swiss must be informed at least one month before the expiry date.

It is acknowledged that Collateral Transfer Agreements are an expensive form of finance and the cost to the Beneficiary in the first year consists of the lenders yearly interest rate, the Provider’s fees, legal fees, due diligence fees, booking fees and arrangements fees. However, the costs are reduced in the second and subsequent years, as the Beneficiary is only liable for the Provider’s fees and the yearly interest charged by the lender.

Costs in the second year can sometimes vary, and whilst the Provider’s fees tend to be fairly stable, interest rates can of course vary from year to year, depending on what the current twelve-month rate for Libor or Euribor is at the time of agreeing the Terms and Conditions of the Collateral Transfer Agreement. Any increase in the yearly interest rate in the second and subsequent years, is for the account of the Beneficiary.