Promissory note discount

1. Promissory notes : May be endorsed. It greatly facilitates the use of the promissory note to be able to obtain financing before the stipulated collection date, gaining liquidity. Notification of its transfer is not mandatory, transmitting security and faster payment
2. Nominal Notes : They are similar to the previous ones, but without a clause to the order, although they can be endorsed to a third
3. Not to order Notes : It may not be assigned to a third party by endorsement. The way to transfer it will be through a credit assignment. The assignment of a promissory note not to order must be communicated to the company that issued it in a reliable manner. They have a tax advantage since they are not obliged to pay for the Tax on Documented Legal Acts so, being free of stamps, there is a cost saving.

A Domiciled Payment is a payment document through which the issuer communicates that it will make the payment of a fixed amount, on a certain date, on behalf of a third party.

As it is not an executive title, the guarantees for the beneficiary are much smaller than in other types of documents such as promissory notes or bills of exchange.

Payment will be made from the date indicated in the document for payment. The Credit Institution is only obliged to make the payment as long as it has not received an express order not to pay and there is sufficient availability in the paying customer’s account. Therefore, it is not a document guaranteed by the Credit Institution that issues it, however, financial entities do not issue these payments to any company, we will normally receive them from companies (by order of these to your bank) of certain solvency. The debit account of the paying customer must always be indicated.

As they are not standardized documents, they are not transferable by endorsement, so a credit assignment must be carried out with reliable notification to the debtor with the same requirements as promissory notes not to order.

The main difference is that, with direct debit payments, the creditor is the one who initiates the collection operation.

In addition, a direct debit receipt has less legal weight than the promissory note, since the latter is signed by both parties, thus forcing the debtor to comply.

ISSUER: Also called DUEBOR or DEBTOR

Company or self-employed worker that implements payments for merchandise received or contracted services through the issuance of a promissory note in favor of its supplier.

BENEFICIARY: RECEIVER and ASSIGNOR of the Promissory Note

Company or self-employed worker that receives the commitment to pay at a future date from its client, for the goods delivered or services rendered.

FINANCIAL ENTITY

Company that advances the amount of the promissory note to the beneficiary, acquiring the rights to collect the promissory note. The assignor collects the promissory note before the due date, assuming interest on its advance.

The interest to be applied in the discount of promissory notes depends on the term of the operation until maturity and the credit quality of the debtor. The transmission of the promissory notes to the order implies the payment of the Tax on Documented Legal Acts (IAJD), more commonly known as stamps . Its value varies depending on the face of the note.