Property financing
Object financing ( English Object finance ) is in the banking a form of special financing of objects , in which the repayment of the loan from the cash flows from the financed and to the lender as collateral , pledged or assigned dependent objects.
Objects to be lent
As a collateral object , for example, are ships , aircraft , satellites , railcars , and fleets in question. These objects are pledged as security or pledged to the lending bank if the borrower is their owner and owner . If they are with a third party, the banks assign the claim to surrender . In a broader sense, real estate financing secured by real estate liens on land or rights equivalent to real property can also be viewed as property financing, but residential and commercial properties in credit institutions are organizationally separated from other property financing, especially since property financing in the narrower sense only represents moveable property financing .
completion
Property financing can be carried out for finished products as well as for not yet finished semi-finished products and intermediate products that still require further processing . In the case of finished products, object financing can either be used to finance production or to finance sales if the products have already been produced but not yet resold. In addition to the risk of non-delivery, there is also the risk of non-acceptance . The credit risk of property financing is highest for semi-finished and intermediate products when no buyer has yet been found for the later end products .
Banking law aspects
According to the since 2014 EU -wide valid Kapitaladäquanzverordnung (abbreviation CRR) are the property financing a subclass of the receivables class "enterprise" (Art. 112g CRR), which according to Art. 122 para. 1 CRR in KSA standard approach one of the six designated risk weights are to be assigned. This undifferentiated aggregation does not take into account the individual risk of such structured finance . It is necessary that the debt service for the loans can be generated in full from the income from the loaned movables. In the loan agreements , covenants must therefore be used to ensure compliance with debt ratios such as the interest burden ratio , debt service coverage ratio or debt service limit , whereby falling below a specified lower limit can result in automatic loan termination . The third-party usability does not normally play a role in the case of typical object-financed objects such as ships or aircraft, but very individually manufactured objects with low market liquidity must be subjected to an examination.
Individual evidence
- ↑ Deutsche Bundesbank, The New Basel Equity Agreement , April 2003, p. 46 f.
- ↑ Christoph Graf von Bernstorff, Internationales Firmenkundengeschäft , 1994, p. 64