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EUROPEAN STANDARD BANK (http://www.esbank.org), (Proforma-Specimen)
BUSINESS LOAN CERTIFICATE
Certificate Unique Registration ESB number: 0836367876 Last update date: 03/01/2013
Copyright Ó EUROPEAN STANDARD BANK, 2012 (further abr. ESB)
Panama City, Republic of Panama
http://www.esbank.org
To whom it may concern
BUSINESS LOAN CERTIFICATE
Certificate Unique Registration ESB number: 0836367876
Date of certificate issued: 04-12-2010
ASSETS-BASED LOAN
for trade by Clearing and Settlement
initially issued to ESB account number 0000 0000 0000 0000 0000
[and
further transferred to the ESB account number 0000 0000 0000 0000 0000]
based on the next assets financial characteristics and properties of
Loan and Assets:
Some Term Definitions:
An algorithm - is a specific set of instructions for carrying out a procedure or solving a problem, usually with the requirement that the procedure terminate at some point. Specific algorithms sometimes also go by the name method, procedure, or technique.
Asset Back Lending ("ABL") - typically provides collateralized credit facilities to borrowers with high financial leverage and marginal cash flows.
An Asset-Based Loan - is a loan, secured by a company's assets. Real estate, accounts receivable (A/R), inventory, and equipment are typical assets used to back the loan. The loan may be backed by a single category of assets or some combination of assets, for instance, a combination of A/R and equipment.
A bank run (also known as a run on the bank) - occurs in a fractional reserve banking system when a large number of customers withdraw their deposits from a financial institution at the same time and either demand cash or transfer those funds into government bonds or precious metals or a safer institution because they believe that the financial institution is, or might become, insolvent. As a bank run progresses, it generates its own momentum, in a kind of self-fulfilling prophecy (or positive feedback loop)– as more people withdraw their deposits, the likelihood of default increases, thus triggering further withdrawals. This can destabilize the bank to the point where it runs out of cash and thus faces sudden bankruptcy.
A banking panic or bank panic is a financial crisis that occurs when many banks suffer runs at the same time, as people suddenly try to convert their threatened deposits into cash or try to get out of their domestic banking system altogether. A systemic banking crisis is one where all or almost all of the banking capital in a country is wiped out. The resulting chain of bankruptcies can cause a long economic recession as domestic businesses and consumers are starved of capital as the domestic banking system shuts down. Much of the Great Depression's economic damage was caused directly by bank runs.
Bookkeeping - is to be understood in the context of a business. It is simply the recording of financial transactions. Transactions include purchases, sales, receipts and payments by an individual or organization. Bookkeeping is usually performed by a bookkeeper. Many individuals mistakenly consider bookkeeping and accounting to be the same thing. This confusion is understandable because the accounting process includes the bookkeeping function, but is just one part of the accounting process. The accountant creates reports from the recorded financial transactions recorded by the bookkeeper and files forms with government agencies. Any process that involves the recording of financial transactions is a bookkeeping process. (http://en.wikipedia.org/wiki/Bookkeeping).
Clearing - The procedure by which an organization acts as an intermediary and assumes the role of a buyer and seller for transactions in order to reconcile orders between transacting parties. Clearing is necessary for the matching of all buy and sell orders in the market. It provides smoother and more efficient markets, as parties can make transfers to the clearing corporation, rather than to each individual party with whom they have transacted. (www.investopedia.com). In banking and finance, clearing denotes all activities from the time a commitment is made for a transaction until it is settled. Clearing is necessary because the speed of trades is much faster than the cycle time for completing the underlying transaction.
In its widest sense clearing involves the management of post-trading, pre-settlement credit exposures, to ensure that trades are settled in accordance with market rules, even if a buyer or seller should become insolvent prior to settlement.
Processes included in clearing are reporting/monitoring, risk margining, netting of trades to single positions, tax handling, and failure handling. (http://en.wikipedia.org/wiki/Clearing_(finance))
Depreciation - A method of allocating the cost of a tangible asset over its useful life. Businesses depreciate long-term assets for both tax and accounting purposes. For accounting purposes, depreciation indicates how much ofan asset’s value has been used up. For tax purposes, businesses can deduct the cost of the tangible assets they purchase as business expenses; however, businesses must depreciate these assets in accordance with IRS rules about how and when the deduction may be taken based on what the asset is and how long it will last.
EUROPEAN STANDARD BANK – Panamian non-licensed financial institution functioning from 2004 in accordance with Panamian Law and have permission for this activity up to 2104 year, acting independently and jointly under licensed panamian non-offshore financial legal entity ESB Monetary SA and providing electronic currency fasility (online electronic bookkeeping system) for lended funds intrabanking transactions based on financial technology created by Swiss bank «Wir», (www.wir.ch) for CHW currency. European Standard Bank is not partner and is not affiliate of Swiss Bank Wir or any other financial institution in the World. European Standsrd Bank provide his service exclusively for his owners, shareholders and their business partners. This service in not available foe general public.
Financial Leverage - (sometimes referred to as gearing in the United Kingdom, or solvency in Australia) is a general term for any technique to multiply gains and losses.Common ways to attain leverage are borrowing money, buying fixed assets and using derivatives.
Insolvency - is the inability of a debtor to pay their debt. Cash flow insolvency involves a lack of liquidity to pay debts as they fall due. Balance sheet insolvency involves having negative net assets—where liabilities exceed assets. Insolvency is not a synonym for bankruptcy, which is a determination of insolvency made by a court of law with resulting legal orders intended to resolve the insolvency.
Liquidity - The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity. Assets that can be easily bought or sold are known as liquid assets. By others words, liquidity is the ability to convert an asset to cash quickly. Also known as "marketability".
Recursion – (In mathematic and programming) an algorithmic technique where a function, in order to accomplish a task, calls itself with some part of the task. In finance and lending Recursion can enhance loan security across all realms (including security of Lender and Beneficiary of lended funds [Seller in deals with payment by lended funds]), in many cases transforming it into a competitive advantage. Using Recursion in lending allowing for our customers to benefit from reduced demands for market value of own assets they provide as collateral for obtaining loan and provide collective knowledge and understanding of security for each Beneficiary of lended funds in any transactions.
a Settlement - is a resolution between disputing parties about a legal case, reached either before or after court action begins. A settlement, as well as dealing with the dispute between the parties is a contract between those parties, and is one possible (and common) result when parties sue (or contemplate so doing) each other in civil proceedings. The plaintiff(s) and defendant(s) identified in the lawsuit can end the dispute between themselves without a trial.
The contract is based upon the bargain that a party foregoes its ability to sue (if it has not sued already), or to continue with the claim (if the plaintiff has sued), in return for the certainty written into the settlement. The courts will enforce the settlement: if it is breached, the party in default could be sued for breach of that contract. In some jurisdictions, the party in default could also face the original action being restored.
The settlement of the lawsuit defines legal requirements of the parties, and is often put in force by an order of the court after a joint stipulation by the parties. In other situations (as where the claims have been satisfied by the payment of a certain sum of money) the plaintiff and defendant can simply file a notice that the case has been dismissed. (http://en.wikipedia.org/wiki/Settlement_(litigation)).
Clearing and Settlement historically proved solution for businesses in Financial Crisis of 2008 – 2023++ years
The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these panics. Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles, currency crises, and sovereign defaults. Financial crises directly result in a loss of paper wealth; they do not directly result in changes in the real economy unless a recession or depression follows.
Many economists have offered theories about how financial crises develop and how they could be prevented. There is little consensus, however, and financial crises are still a regular occurrence around the world.
Several major financial institutions either failed, were bailed-out by governments, or merged (voluntarily or otherwise) during the crisis. While the specific circumstances varied, in general the decline in the value of mortgage-backed securities held by these companies resulted in either their insolvency, the equivalent of bank runs as investors pulled funds from them, or inability to secure new funding in the credit markets.
Losses on mortgage-backed securities and other assets purchased with borrowed money have dramatically reduced the capital base of financial institutions, rendering many either insolvent or less capable of lending.
These losses impacted the ability of financial institutions to lend, slowing economic activity.
slowing economic activity, by other word a recession in basic terms. It is when the economy slows down. It is when people stop buying/selling/trading. The economy is the over all general money in a way and when it "slows down" the money gets lesser and everyone gets poorer.
Economy means the system of production and distribution and consumption so when there is slow economic activity there is less of all of those.
A period of slow economic activity is an amount of time where there is less production, distribution, and consumption. Generally causing a lack of money.
The Great Depression was a recession in the USA and there was a lack of money because there was a lack of the system of production and distribution and consumption.
«Most of the world's largest economies are heading for a period of slower growth, and it is increasingly likely that the U.S. will share that fate, according to the Organization for Economic Cooperation and Development's composite leading indicators.» - wrote in 2011 PAUL HANNON in “The Wall Street Journal”. And most economists predict crisis period 2008-2023++ years.
According to the Chicago Fed's National Activity Index, September 2012 economic activity slowed from the previous month, now at -0.56. The indicator has been negative (meaning below-trend growth) for six of the past eight months, and the all-important 3-month moving average has been negative for all eight of those months and 21 of the last 27 months.
“Entering the final quarter of the [2012] year, domestic and global economic conditions are extremely fragile. Across the globe, countries are in outright recession, and in some instances where aggregate growth is holding above the zero line, manufacturing sectors are contracting. The only issue left to determine is the degree of the downturn underway. International trade is declining, so weaknesses in different parts of the world are reinforcing domestic deteriorations in economies continents away…
New government initiatives have been announced, particularly by central banks, in an attempt to counteract deteriorating economic conditions. These latest programs in the U.S. and Europe are similar to previous efforts. While prices for risk assets have improved, governments have not been able to address underlying debt imbalances. Thus, nothing suggests that these latest actions do anything to change the extreme over-indebtedness of major global economies. “ – wrote Van R. Hoisington Lacy H. Hunt, Ph.D.
Despite scattered signs of improvement, the world economic situation and
prospects continue to be challenging. After a marked slowdown in 2011, global
economic growth will likely remain tepid in 2012, with most regions expand-
ing at a pace below potential. In the face of subdued growth, the jobs crisis
continues, with global unemployment still above its pre-crisis level and unem-
ployment in the euro area rising rapidly. The risks to the global outlook are tilted
to the downside. The euro area debt crisis remains the biggest threat to the
world economy. An escalation of the crisis would likely be associated with severe
turmoil on financial markets and a sharp rise in global risk aversion, leading to
a contraction of economic activity in developed countries, which would spill
over to developing countries and economies in transition. A further sharp rise
in global energy prices may also stifle global growth. National and international
concerted policies should be enacted on multiple fronts in order to break out
of the vicious cycle of deleveraging, rising unemployment, fiscal austerity and
financial sector fragility in developed economies. Breaking this cycle requires
policy shifts away from fiscal austerity and towards more counter-cyclical fiscal
stances oriented to job creation and green growth. These policies need to be
better coordinated across the major economies and concerted with continued
expansionary monetary policies in developed countries, and accompanied by
accelerated financial sector reforms and enhanced development assistance for
low-income countries. [1]
Although your small business may not be in the national spotlight or have a public relations guru of its own to consult, no company is too small for a crisis. From bankruptcy to disgruntled customers or employees seeking revenge, even a mom-and-pop should be prepared to handle the fundamentals of crisis management.