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This is a completely special type of loan, which refers to financial services for businesses, both small and medium, and large. Such a service is provided mainly by banks in order to secure applications that are submitted in the event of auctions or tenders, in particular, by state or municipal bodies. According to the rules for participation in auctions or state tenders such as transparent procurement, the application for participation must be provided. Participating companies have the opportunity to invest as money, which can be up to 5% of the total contract amount, or present a special guarantee from the bank. In the first case, if the company's own funds are insufficient, or if it wants to participate in several different tenders, the company can also apply for bank loans.
In this case, although all banks offer different conditions, the term for financing this type of credit will be up to a month or no more than one year. The amount that a participating company can receive will depend on the value of the tender contract/lot and varies within the limits of 100 - 300 million. Interest rates for this type of credit vary greatly from bank to bank. Today, they average from 8% to 24% annually. Also, in the case of tender lending, either a pledge of the company's property or a serious guarantee may be required. It may take up to ten days for a loan offer to be accepted.
If the company did not receive a tender or did not win the auction, the security deposit will be returned to the losing participants within 5 working days. The winner will receive it only after completing all the procedures for concluding the contract. The borrower can also send the received funds back in order to repay the debt to his bank. An automatic repayment scheme is often assumed at the expense of returned collateral funds. We note that according to the law, the security for the tender can be presented exclusively in monetary form.
Recently, banks have created a new form of this lending in the form of a tender loan without collateral. This is a specialized bank loan that assumes some requirements for the loan company. It has two options: a one-time type, and also with a credit line that can be renewed. The first option assumes participation in a single specific tender. The second assumes that the borrower will be able to use the funds to participate in various auctions for one year. For a one-time loan, interest rates are always lower. The one-time type of loan can be issued only for up to ninety days - because this is the time that all tender procedures take place according to the law.
The advantage of a tender loan is that it is issued according to a much more simplified scheme than with other forms of lending. You can get such a loan both in the bank itself and through a credit broker, and the rates will not differ significantly.
