All steps of the Collateral process
What usually happens in a business transaction or in a supply? What are the steps involved in a supply between a contractor and a supplier? In most cases the relationship between the supplier and the contractor is direct.
The supplier and the contractor:
- they mutually agree on the price for supply, terms of payment and time of realization
- sign a contract and often it is a standard one
- The supplier performs the supply
- Customer or buyer checks that the supply is regular
- The customer or buyer manages payments as fixed in the contract
- Sometimes it happens that the supplier, the client or both can request guarantees
In order to ensure the payment within a commercial transaction, It’s not always possible or cheaper to submit a contract to commercial guarantees, such as bank guarantees, surety bonds or performance bonds. Collateral is a smart, quick and easy, trusteeship solution, that is able to guarantee both parties in a national or international business transaction or supply.
The application of “Collateral” process to SMe’s business transactions takes place through some consequential, clear and well defined steps
In the precontracual step, supplier and customer describes the business transaction to deal with. Once both parties have the information needed, sign the preliminary agreement The contract identifies the contractors of the framework contract and the specific skills, obligations and benefits of each of them. It is drawn up by smartecht and signed from supplier and customer or buyer. Smartecht also signs the contract as a third party in the business transaction. It contains the detailed description of the project to be addressed, the documentary part provided by the supplier, the preliminary projects, the graphs and the special tender specifications, which become integral part of the final contract. Moreover it also establishes payments relating to the progress of work. Obbligations of the beneficiary about on-time and effective implementation of the project. Obbligations of the applicant about setting up funding according to the contract rules, Obbligations of Smartecht to monitor and verify the achievement of the “progress of work”. According to the rules of the contract, it is possible to proceed with the opening of the bound bank account which is an essential part of the Collateral process. The customer proceeds to open bank account from his bank. The account is managed only through special power attorney. Once funding has been estabilished to ensure beneficiary, can begin the operative phase of the project.