Check-exchange procedure

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The check-bill of exchange procedure ( also bill of exchange-check procedure or reverse bill of exchange ) is used to finance commercial transactions and works as follows:

The buyer of a product or service sends the seller or supplier a check together with a bill of exchange for the corresponding invoice amount (possibly with deduction of a discount) with the request to sign the bill of exchange as the issuer and send it back to him. The seller now submits the check to his credit institution for credit, while the buyer signs the bill as the drawee and in turn submits it to his bank for discount . The issued check can now be cashed with the credited bill of exchange. The bank grants the buyer of the goods a so-called discount credit until the bill of exchange is due .

The advantage of financing via the check / bill of exchange method compared to many other types of credit (e.g. an account overdraft) is the cheaper financing costs of the discount credit. The bank usually grants lower interest rates for a discount loan, since the issuer (here the seller) is also liable for a bill of exchange until it is redeemed, in addition to the drawee (here the buyer). In addition, a bill of exchange loan is more marketable, since it securitizes a claim that can be transferred relatively easily by means of an endorsement (e.g. for refinancing at another bank).

Ultimately, the buyer "borrows" the, possibly better, creditworthiness of the supplier. It is thus a form of loan loan .

The check / bill of exchange procedure, along with the bill of exchange itself, has lost a lot of its importance in recent years. On the one hand , this is due to the fact that the bill of exchange is bound to a document, i.e. it is not computer or machine capable. On the other hand, due to the elimination of the possibility of rediscounting commercial bills by banks at the Deutsche Bundesbank , this is no longer so interesting for banks.

literature

  • Franz-Joseph Busse: Basics of corporate finance . Oldenbourg Wissenschaftsverlag, 2003, ISBN 3486254065 , p. 428.
  • Klaus Olfert: Financing , 15th edition, Kiehl Verlag Herne, 2011, ISBN 978-3-470-53495-4 , p. 316