The letters next to the depths of the weeds

In this article, we eliminate the bank by-product letters (SAL) related to integrated loans. What are when they are useful and when they are not?

Here you have the content of these documents:

“The project agreement states that current account funds … will be paid for the aforementioned payment (title of the project) and only then (the Bank) is satisfied that the paid work has actually been made … the borrower does not It fulfills the project described here, all funds in this account must be immediately available to the guarantor in order to terminate and pay the project costs, in this case (the borrower) waives any claim or interest in the rest of money. (Bank).

This is an irrevocable commitment that the (bank) does not recover or compensate. “

Quite interesting! This letter / agreement maintains the game loan to finance the completion of the project, even if the borrower (bank customer) fails / by default.

When will the cards be canceled?

These documents are a common collateral requirement if the seller or bonus of the sub-unit is issued for the guarantee. If the borrower (who is also the developer and the borrower) is based on the financing of the construction loan work, the SAL protects the guarantee by providing funds to terminate the work in case of insolvency.

What a great idea. Why do not we use them all? Let’s see another example.

Business projects

The project owner contracts a contractor and the project is financed with a bank loan. The bank needs a guarantee that the property / project (which supports the loan) will be constructed in the manner prescribed. The Account and Payments of Bonds obtains it and guarantees that non-paid bills are not paid for the asset. These two aspects are useful for the owner and the project provider. Remember that, in the case of the insolvent borrower, the bank becomes the new owner of the project.

It is common for a bank to use a creditor in a project and want to become a recipient of the P & P link: this is achieved through the issuance of a double duty driver. Does an intelligent subordinate also require a provider of a lender?

In the case of business projects, it is usual that you DO NOT obtain a provider of the lender. Why not? What’s different?

a. The bank is a guaranteed lender

b. The bank can be transferred to the property of the borrower

c. Dual Obligee Rider has a similar purpose to SAL

a. i b. It’s true, but the answer is c.

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