If you wonder What is a banking pool, in what cases is it requested and what benefits does it have for your company, In this article you will find the answers.
However, one of the greatest advantages of the banking pool is that it provides data about the level of diversification of financial sources. In this aspect, thanks to alternative financing, you have the possibility of diversifying your financing sources in an appropriate way; choosing the liability that best fits a specific financial need.
What is the banking pool?
A banking pool is a document prepared by the company that indicates the operations it has open with all banking entities.
This report aims show a map of the risks when requesting financing.
Credit institutions usually request the banking pool as a complement to the CIRBE (Risk Information Center of the Bank of Spain) and accounting information for the study and approval of a product that involves risk (loan, line of credit, leasing, etc.).
However, its preparation is also useful for the financial management of the company, since it shows more clearly the level of bank debt, the weight that each entity has as a supplier, the risks assumed, etc.
Although there is no standardized banking pool model, generally, the banking pool incorporates the following data:
- The date of the document.
- The banking entities with which the company works.
- The types of financing contracted with each entity.
- The hiring date of each of them.
- Credit limits granted for each product.
- Amortization terms and payment schedule.
- The available balance and risk as of the date the document is prepared.
- Guarantees provided.
In summary, The banking pool offers an image of solvency and allows the company to organize its financial resources in a more efficient way.
Differences between banking pool and financial pool
In short, the difference between a financial pool and a banking pool is the breadth of external funding sources included.
While a banking pool only shows the liabilities contracted with traditional banking, a financial pool includes alternative financing sources that They do not appear in the CIRBE, being able to incorporate a wide variety of credit products, some of them specialized in a type of financing for the company:
- Financing of ordinary activity.
- Expansion financing.
- Financing of fixed assets.
- Financing of current assets.
Alternative financial products provide greater opportunities to diversify between different sources of financing, avoiding the risk of banking concentration.
Why diversify financing sources?
Alternative financing has the ability to provide a suitable product for a specific need.
Banking, for its part, has great infrastructure and logistics. It can be useful for certain cases, but it is characterized by its slow procedures.
In any case, Diversifying between different external financial sources provides the following advantages:
- Risk reduction: The diversification of sources provides better access to credit and avoids the vulnerability of being supported only by banking sources, which are of the same nature and present a similar operation when studying and granting financing.
- Greater flexibility: the company has greater negotiating capacity and options available in the event of a tightening of conditions by one of its suppliers. Alternative financing is not subject to the credit market.
- Better use of opportunities: By having multiple ways to obtain resources, the company is in a better position to obtain resources adapted to its needs, in an agile way, to take advantage of the opportunities that may arise.
- Improvement of the financial structure: Diversification provides the possibility of adapting liabilities with the nature of the obligations, characteristics, policies, plans and objectives of the company. In this way, the company's Cash Flow and Balance Sheet are favored.
If you need financing for your company, In Alter Finance we are specialists in finding solutionss through our agreements with non-banking financial entities. You can contact our team of experts.