Each enterprise or organization in the course of ongoing work interacts with various kinds of counterparties. Very often the result of such relationships are debt obligations. Their presence indicates the presence of borrowed capital in the cash flow of the company.
Indeed, in practice, it is impossible to do without raising additional funds and at the same time it is impossible to develop successfully. The market economy contributes to the development of competition, which forces managers to search for ways to modernize the production process and sale of goods. So, a debt obligation is an agreement of two parties on the provision of a certain amount of money or material resources on terms of payment, repayment, urgency.
First of all, it is worth distinguishing between bank and commercial lending. Commercial loans are debt obligations between two firms, usually for deferred payment. For example, when the shipment of goods was made, and payment for it will be made after a certain period of time in parts or a single payment in full. Such relations are made out in the form of a commodity loan or a loan agreement.
Accordingly, bank lending is an agreement between a credit institution and its client, legalized by an agreement intended for these purposes. A loan agreement can be considered valid from the moment of the actual transfer of cash or tangible property to the borrower, and it can be concluded in both national and foreign currencies. Moreover, the current regulatory legal acts stipulate that an agreement between a credit institution and an individual is valid even verbally, it may be gratuitous. The contract for the free transfer of funds means that the borrower at the end of the specified period is obliged to return only the loaned value without interest. The loan agreement is considered valid if there is a supporting document.
Debt obligations certified by a loan agreement give the borrower the full right not to take funds and terminate the agreement before it comes into force. And the creditor gets the opportunity not to provide the indicated amount of funds if there are reasonable doubts about the full repayment of the debt, or the legality and veracity of the documents that were submitted along with the loan application.
In addition, debt obligations may be expressed as a commercial or commodity loan. The first is a separate clause in the main agreement of the two counterparties. As a rule, it enables an economic entity to receive goods with deferred payment or in installments. And for registration of a commodity loan, it is necessary to draw up a separate agreement, which reflects the obligation of one entity to provide another person with specific goods. It allows enterprises to make up for a temporary shortage of material resources without interrupting the production process.
A special role in the economic life of the country is played by state debt obligations. Often, government loans are used to cover the budget deficit or in settlements with foreign countries. In some cases, the government uses this tool as a guarantee or surety for a third party. Thus, the government convinces the lender of the solvency of the borrower, and also shows his willingness to pay off all or part of the debt in the presence of adverse situations. Of course, such transactions are carried out only at the level of large-scale programs of strategic importance.