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  1. Public Institutions
  2. Financing
  3. Loans
  4. Conditional Loan

Conditional Loan

Short-term loan commitment with which the bank takes the risk by ensuring the issuance of bank guarantees or letters of credit in favor of counterparties of the customer.

In case of payment under the bank guarantees or letters of credit the conditional loan is transformed into an effective and immediately due and payable financing, unless previously agreed terms and conditions apply.

Conditional Loan

Advantages

  • Flexibility There is no limit for number of guarantees that may be issued within the approved limit

  • Speed and convenience You can use Bulbank Online and order issuance of guarantees to your counterparts without leaving your office.

Variations

Depending on the purpose conditional loans are divided into two types:

  • Commercial conditional loan
    The bank undertakes the risk in securing either issuing of bank guarantees or letters of credit with a commercial purpose (e.g. performance guarantee, bid bond, etc.).
  • Financial conditional loan
    The bank undertakes the risk in securing either issuing of bank guarantees or letters of credit that involve financial risk in favor of the counterparties of the customer (e.g. payment guarantee, customs guarantee, etc.).

Collateral

The loan may be secured by assets of the borrower or of third parties, established in favour of the bank as per the procedure and in the form established by law. The assets could be:

  • Real Estate

  • Movable assests

  • Financial assets

  • Valuables

  • Securities

  • Mutual Funds

  • Receivables from third parties, etc.

Property insurance of collaterals is required.

Frequently Asked Questions

The market appraisal should be  renewed every year. The insurance must be maintained valid for the entire loan period.

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