This transaction allows an advance to be created. An advance can be granted directly and without a global contract to any party (stored in the database). Copying of contracts from the Info transaction is only possible if these were created 'standalone', i.e. without a main contract.
The fields “Advance type”, “Type of risk” and the checkbox “Recourse” default to meaningful values, but the user can change these manually as required. For the advance of sight documents, the advance type defaults to “Purchase”, and in the case of usance documents, the advance type defaults to “Discounting”. For example, if an advance is processed for a confirmed Export L/C under which usance documents were presented, the fields for “advance type” default to the values “Discounting” and “Export L/C documents”. The field “Type of risk” then contains the entry “Confirmed Export L/C”, and the checkbox for “Recourse” is checked.
If “Forfaiting” is selected as “advance type”, then the checkbox for “Recourse” will be empty and cannot be changed, since the possibility of a claim-back is excluded in the case of a forfaiting transaction.
If an advance is to be paid on a document set under an Export L/C, the transaction can be processed immediately after after the registration of the received documents (Receiving Documents (LETDRV)).
If prefinancing was granted to the beneficiary of the L/C under the Export L/C as part of a Introduction, then the repayment of the packing credit is automatically proposed in this transaction. The repayment amount is calculated based on the proportion of the Packing Credit in relation to the Export L/C and the document amount; several interest options are available for the repayment.
Advances under an Import or Export Collection can be processed using the transactions Sending Documents (BOTDAV) or Advising Documents (BCTDAV) as soon as the contract has been created.
To process an advance for sight documents under “Transferred L/C”, the transactions Receiving Documents from 2nd Beneficiary (LTTDCK) on the secondary beneficiary side and Receiving Documents from 1st Beneficiary (BTTDCK) on the first beneficiary side must first be processed for the advance.
For usance documents, the transaction Send, Accept and Settle Documents (BTTPAY) must have been processed under “Transferred L/C”.
If the advance transaction is created with a global contract, the available maturities are displayed in the upper grid on the panel. An additional column displays any amounts already used for a previous advance, as well as the amount currently still available for an advance. The sum total of the available and the selected amounts is proposed as the amount for the current advance. The user can override the value in the field “Advanced Amount” and enter the desired amount instead. The system then automatically calculates the percentage at which the advance is granted. Similarly, the user also has the option to enter the percentage at which the advance is to be granted and let the system calculate the amount to be advanced. It is not possible to advance more than 100%.
The following example is intended to illustrate the processing options:
A transfer of EUR 800,000 is made for an Export L/C in the amount of EUR 1,000,000. Under the Transfer L/C, the secondary beneficiary presents documents to the value of EUR 80,000. The primary beneficiary presents his invoices to be exchanged, amounting to EUR 100,000 and can expect proceeds of EUR 20,000 from the transfer.
The documents are entered in the transaction Send, Accept and Settle Documents (BTTPAY) under “Transfer L/C”, and the maturities for the primary beneficiary in the amount of EUR 20,000 and for the secondary beneficiary in the amount of EUR 80,000 are posted accordingly.
The maturity of EUR 20,000 for the primary beneficiary was advanced at 90%, i.e., EUR 18,000. Therefore, a remainder of EUR 2,000 for the primary beneficiary and EUR 80,000 from the maturity for the secondary beneficiary are still available for a further advance on the document set, i.e. a total of EUR 82,000.
If, in the example above, the maturity dates are identical, it is possible to process advances for several maturities simultaneously. If the maturity dates differ, or if different interest rates/margins are to be applied in calculating the cash amount, then separate advances should be processed for each maturity. The checkbox at the beginning of the grid row can be used to select for which maturity the advance is to be processed.
Interest (bank discount) is calculated on the advanced amount. The discount rate is entered in the “Interest details” panel. There are a number of entry fields available for this:
Input field | Description |
---|---|
Rate type | Selection of the installment to be used for calculating interest. |
Interest costs | Costs of procuring the funds on the money market. If an interest rate is stored for the rate type selected, this rate will be used and then the field can no longer be edited. In all other cases, the field may be freely edited. The interest costs displayed will be used as the base rate in the interest calculation. |
Liquidity costs | Costs arising due to liquidity reserves being kept available. |
Our margin | The share of the overall interest rate booked as income in the bank's books. Defaults to a value based on the installment type and takes account of any special conditions that may be stored. |
Total interest rate | Sum total of interest costs + liquidity costs + our margin The total interest rate used in order to calculate the commission. |
As an alternative to recording the margin as a percentage, by means of the “Flat Amount for Financing Period” checkbox it is possible to stipulate a fixed amount for the entire term to maturity. A fixed amount recorded is converted into an interest rate on the basis of 360/360 and incorporated in the “Our margin” field.
Days of grace recorded are taken into account in calculating the discount.
The net proceeds are the amount advanced less interest. This is the figure credited to the customer (less any fees) when an advance is granted.
Further particulars on the subject of “Advances” are available in the “Introduction”.
This transaction creates a new Advance contract.
If an existing Advance contract is used, it may not be open or closed.
Creation of an advance contract is possible standalone without a parent contract, in relation with a document set under Export LC, a document set under a transferred LC or under an Export Collection.
For incoming allNETT / RIVO messages see Overview of Incoming messages - allNETT / RIVO.
None
For more information see TRNDIA Diaries.
Action | Description | Diary | Follow-up transaction | Comment |
---|---|---|---|---|
Replace | Advance past due | Maturity date + 1 Working Day | Repayment / Recourse | if “due date” is not empty and “Recourse” checkbox is set |
Replace | Advance (without recourse) will be past due | Maturity date - 5 Working Days | Settling an Advance | if “due date” is not empty and “Recourse” checkbox is not set |
Create | End of Rollover period | 2 Working Days before Interest Due Date | Settling an Advance | If “Roll-Over” checkbox is checked and the “Interest Due Date” is earlier then the “New Due Date” |
The liability is booked regardless of “Type of Advance” value.
Details on creation of messages can be found under DOCEOT Messages. For outgoing allNETT / RIVO messages see Overview of Outgoing messages - allNETT / RIVO.
Assignment Messages and messages concerning Participations Sold (Syndications) will be created.
Name of Message | Receiver | Message ID | SWIFT | TCO | Comment |
---|---|---|---|---|---|
Advance | Advanced party | BPTFIA1 | Including details of the advance (depending on “advance type” 'Discounting', 'Purchase' or 'Invoice Advance') | ||
Advance | Beneficary | BPTBEF1 |
Signature required
Advance Details
Parties
Interest Details
Liability
Settlement Details
Settlement
Bookings
Completion
Messages
Compliance
Attachments
Assignment
Datafield | Description |
---|---|
Parent Reference | cf Appendix A, Table BPD field PNTREF |
Own Reference | cf Appendix A, Table BPD field OWNREF |
Responsible User | cf Appendix A, Table BPD field OWNUSR |
Type of Financing | cf Appendix A, Table BPD field FINTYP |
Special Type of Financing | cf Appendix A, Table BPD field FINSUBTYP |
Type of Risk | cf Appendix A, Table BPD field FINRSKTYP |
Recourse Flag | cf Appendix A, Table BPD field FINRECFLG |
Percentage | cf Appendix A, Table BPD field PCTFIN |
Currency | cf Appendix A, Table CBB field CUR |
Maximum Amount | cf Appendix A, Table CBB field AMT |
Opening Date | cf Appendix A, Table BPD field OPNDAT |
Maturity Date | cf Appendix A, Table BPD field MATDAT |
Interest days | cf Appendix A, Table BPD field INTDAY |
Rate Definition | cf Appendix A, Table BPD field INTIRT |
Currency | cf Appendix A, Table CBB field CUR |
Nominal Amount | cf Appendix A, Table CBB field AMT |
External Key | cf Appendix A, Table PTS field EXTKEY |
Name | cf Appendix A, Table PTS field NAM |
Reference for Address (Optional) | cf Appendix A, Table PTS field REF |
External Key | cf Appendix A, Table PTS field EXTKEY |
Name | cf Appendix A, Table PTS field NAM |
Reference for Address (Optional) | cf Appendix A, Table PTS field REF |
External Key | cf Appendix A, Table PTS field EXTKEY |
Name | cf Appendix A, Table PTS field NAM |
Reference for Address (Optional) | cf Appendix A, Table PTS field REF |
Assignment of Proceeds | cf Appendix A, Table BPD field AOPFLG |
Participation Sold Flag | cf Appendix A, Table BPD field SYNFLG |
Datafield | Description |
---|---|
Address Block | cf Appendix A, Table PTS field ADRBLK |
Address Block | cf Appendix A, Table PTS field ADRBLK |
External Key | cf Appendix A, Table PTS field EXTKEY |
Address Block | cf Appendix A, Table PTS field ADRBLK |
Reference for Address (Optional) | cf Appendix A, Table PTS field REF |
Country Code (for Statistics) | cf Appendix A, Table BPD field STACTY |
External Key | cf Appendix A, Table PTS field EXTKEY |
Address Block | cf Appendix A, Table PTS field ADRBLK |
Reference for Address (Optional) | cf Appendix A, Table PTS field REF |
Address Block | cf Appendix A, Table PTS field ADRBLK |
Datafield | Description |
---|---|
Roll-Over Financing | cf Appendix A, Table BPD field ROLOVRFLG |
Cash Base | cf Appendix A, Table BPD field CSHRAT |
Liquidity costs | cf Appendix A, Table BPD field LQDRAT |
Our margin | cf Appendix A, Table BPD field OWNRAT |
Fixed price for total maturity | Alternative fixed amount for the total term to maturity. (instead of an interest rate for 'Our margin') |
Interest Start Date | cf Appendix A, Table BPD field BEGINTDAT |
Interest Due Date | cf Appendix A, Table BPD field ENDINTDAT |
Grace Days | cf Appendix A, Table BPD field GRADAY |