What is bills avalization?
This is a bank guarantee for the obligations of the bill payer. In other words, you can offer the seller delayed payment and pay with a bill - this is a 100% guarantee of payment.
What determines the cost of avalization?
The cost depends on the principal depending on the amount of the bill, the multiplicity of transactions and the solvency of the drawer.
How can I use bills avalization?
The use of tax anticipation bills avalized by the bank enables the company that issues such bills to receive a deferred payment of value added tax / excise tax. For more information about the possibilities of use, see article 229 of the Tax Code of Ukraine.
Why can't I just take out a loan?
Aval fee is significantly lower than loan fee.
How is bank aval repaid / closed?
The payer independently repays or pays his bill of exchange within the specified period or ahead of schedule. After repayment, it is enough to provide the bank with documents confirming the transaction.
Is it possible to set multiple avalization so as not to carry out all clearance operations every time?
Yes, it is possible to set a recovery limit for a certain period, for example, for 1 year.
Significant characteristics of promissory note avalization