Blank loan
As unsecured loan (or unsecured loan ; ital. Bianco "white"; Engl. Uncovered loan or unsecured loan ) is known in banking loans that no set of assessable collateral by banks to borrowers are granted. If only part of the loan secured, then one speaks of the unsecured part than the unsecured portion of the loan.
General
All over the world and in Germany, it is up to the credit institutions whether to secure their loans or make them unsecured. It is therefore the task of the corporate credit risk policy of each individual bank to also manage its own loan portfolio according to the criterion of credit protection.
The creditworthiness check that precedes a credit decision must show how upright the creditworthiness of a borrower is . According to § 18 KWG , this check has to evaluate certain lending documents on assets , debts and income of the borrower, for which the debt servicing from the income / assets is considered certain. When weighing up, key business figures and empirical customer data play a decisive role in assessing the risk of counterparty default . If the borrower has an excellent credit rating , it is justifiable to provide him with loans without loan collateral. The bank then expects that the loan will be easily repaid from the borrower's income or assets and that it will not have to rely on the realization of collateral provided.
Only certain loans such as real estate financing ( real estate loans , mortgage loans ) are by law ( § 21 para. 3 no. 1 KWG in conjunction with § 14 para. 1 and § 16 para. 1 and 2 Pfandbrief Act ) with liens ( mortgage , mortgage ) to to secure. From the nature of the type of credit arises when effect Lombard credit that he through the pledging of securities must be secured.
With all other types of credit, it is up to the credit institutions whether and how they want to request credit security.
history
As early as 1794 it became known that the Amsterdam exchange bank had issued 10.5 million guilders of illegal unsecured loans to the Dutch East India Company . This scandal marked the beginning of the end of the bank, which had to close its doors for good in 1820. In 1866 a book about banking said that the blank loan was a loan "for which only the account holder is liable," by which the borrower was meant. Unsecured loans have been registered with cooperative banks since September 1879 at the latest , in March 1884 it was said that a loan application was approved without collateral, "because the applicant is known to be solvent". In the case of Swiss cooperative banks, the “unsecured loan” was an exception in 1925 “and is only granted to municipalities and corporations”. For Georg Obst , the blank loan in 1951 consisted of the fact that “the borrower offers the guarantee that the loan is secure in his whole personality”. The savings bank regulations of the federal states called the blank loan "unsecured personal loan". In 1958 Otto Hintner used the terms blank credit and personal credit synonymously. In 1961, Wilhelm Kalveram made a distinction between blank credit, simple and collective personal credit .
Legal issues
In May 1998, the Federal Financial Supervisory Authority considered it “incompatible with the principles of proper business management to extend blank loans to a non-governmental address in an amount which, if the address failed, would consume the entire liable equity of the institute”.
The Capital Adequacy Ordinance (CRR) is the central standard for the regulatory recognition of credit collateral (referred to herein as "credit risk mitigation techniques"). However, it does not deal with unsecured loans, but rather with secured loans and stipulates in Art. 193 et seq. CRR principles for the recognition of loan collateral that lead to a lower capital requirement than comparable unsecured loans. According to the CRR, unsecured loans as a residual amount are therefore burdened with full capital adequacy; a more favorable risk weighting of a blanket risk position can only be achieved through the rating . Loan collateral therefore reduces the cost of equity for granted loans and thus the borrowing costs for the borrower. For this reason, unsecured loans - assuming the same borrower rating - can tend to be more expensive than perfectly secured loans.
species
The banks' credit risk also increases as the credit period increases. Therefore, the shorter the loan term, the higher the likelihood of a blank loan.
Retail banking
By their very nature , no credit collateral is required for short-term loans in standardized private customer business such as overdraft facilities , guarantee loans , microcredits , consumer loans and credit card limits if their amount does not exceed three to five times a regular monthly income. Long-term consumer loans are usually secured. The law requires security for real estate financing; Lombard loans must be secured by contract.
Building society loans
According to Section 7 (4) of the Bausparkassengesetz , blank loans are permitted under certain conditions. They must be provided with a negative declaration and do not need to be secured if the amount is low ( building society loan up to a maximum of EUR 10,000 or interim loans up to EUR 5,000). The granting of unsecured loan parts is not permitted at building societies in particular if the loan limit of 80% of the loan value is exceeded when the loan is granted . The scope of the blank loans granted by the Bausparkasse is limited by supervisory law.
Corporate business
In the area of corporate finance, working capital loans to finance current assets are granted as unsecured loans, if the economic key figures and the data history of the borrower allow this. Particularly in the corporate customer business, unsecured loans are subject to special rules of thumb based on business figures. Blank loans are supposed to
- Do not exceed 30 to 40% of the borrower's equity ;
- Do not exceed 20 to 25% of the borrower's net sales ;
- Do not exceed three to four times the sustainable cash flow .
In international credit transactions, large banks almost exclusively grant loans to large companies without collateral, even if they are available over the long term. This applies to stand-by loans or roll-over loans . Long-term investment loans are usually secured.
Municipal credit
In the German municipal lending banks will only grant unsecured loans because there the communities is communal not legally allowed to provide collateral (about § 86 para. 5 GemO NRW ). This provision is justified with the consideration that the creditors must have sufficient tax power , assets and insolvency as security factors. If collateral is provided in violation of the prohibition, it is void according to Section 130 (2) GemO NRW .
Contract drafting
A blank loan can be recognized by the fact that the loan condition "loan collateral", which is otherwise common in loan agreements, is omitted; it is not explicitly mentioned as a blank loan, as this could be interpreted as a permanent waiver of collateral. Such a waiver would contradict the right of the general terms and conditions to provide additional collateral for loans at any time. In order to establish the reference to the supplementary security regulations and the AGB lien , the validity of the AGB is agreed in the loan agreement.
In addition, as is customary in banking, certain covenants are included in the loan agreements for unsecured loans . The negative declaration prevents other creditors from receiving loan collateral without the lending bank being offered equivalent securities at the same time. In a positive declaration, the borrower undertakes to provide collateral if a certain credit event should occur. Further covenants can prohibit the borrower from selling business assets ( disposals ). In the event of a significant deterioration in the financial situation, a bank can also request the collateralization of previously unsecured loans on the basis of this clause .
Blank loans from different creditors do not rank among themselves as compared to the common debtor , but in the crisis of the debtor a “race” of the creditors for credit security or for debt servicing can develop. If the income or cash flow is scarce, the debtor could unilaterally change the order of debt servicing and thereby create a ranking. So that unsecured claims cannot acquire a better ranking among each other, negative declarations are supplemented by pari-passu clauses and guarantee the beneficiary creditor an equal debt service with other unsecured creditors up to insolvency or out-of-court restructuring .
Others
Unsecured loans are also given if loan collateral is provided that cannot ( or cannot) be valued in accordance with customary banking practice (e.g. letters of comfort or assignment of wages and salaries ), has legal risks or is not customary in banking. Since the provision of loan collateral incurs fees (such as notary fees for mortgages), the blank loan is also often cheaper.
Switzerland
Since the introduction of the Consumer Credit Act in March 2001, extensive investigations into the financial situation of the borrower have to be carried out for these loans. According to Sections 7a and 7b of this Act, consumer loans are typical unsecured loans in Switzerland.
Individual evidence
- ^ Karl Wolfhart Nitsch: Banking law for business economists and business lawyers , 2010, p. 141.
- ↑ Michael Schemmann: Germany's Money Illusion , 2013, p. 10.
- ↑ Theodor Wenzelburger: The banking system, his theory and practice , 1866, p. 62.
- ↑ Birgit Susanne Müller: Credit Cooperatives in Bavaria , 2008, p. 240.
- ^ Paul Beuttner: The financial management of the cooperatives: with special consideration of the Swiss bank and consumer cooperatives , 1925, p. 24.
- ↑ Georg Obst / Otto Hintner: Geld-, Bank- und Börsenwesen , 1951, p. 337.
- ↑ cf. Sections 20–22 SpkVO NRW from April 1, 1958
- ↑ Otto Hintner: Kredit und Kreditformen , in: Handwortbuch der Betriebswirtschaft, Volume II, 1958, p. 3512.
- ^ Wilhelm Kalveram / Hans Günther: Bankbetriebslehre , 1961, p. 47
- ↑ BaFin circular 6/1998 of May 5, 1998, explanations on the Large Loans and Million Loans Ordinance (GroMiKV)
- ↑ Moritz Brinkmann: Loan collateral for movable property and claims , 2011, p. 4.
- ↑ Peter Derleder / Kai-Oliver Knops / Heinz Georg Bamberger: Handbook on German and European Banking Law , 2008, p. 591.
- ↑ BaFin, Explanations on the amendment of the Bausparkasse Ordinance by the Ordinance on the Amendment of the Bausparkasse Ordinance
- ^ A b Max Lüscher-Marty: Theory and Practice of Bank Loans: Credit Risk Management and Corporate Loans , 2011, chap. 4.04.
- ↑ No. 21 or No. 22 AGB-Sparkassen
- ↑ Axel Schlieter: The pledging of GmbH shares , 2009, p. 149.
