1. Loan Contract, Bank Credit Contract, Factoring Contract
Dorota Wieczorkowska
Faculty of Law, Administration and Economics
University of Wrocław

2. Ways of financing the company

3. Equity vs. Debt Equity Shareholders’/Partners’ contribution
Capital raisings
Surcharges
Profits
Debt
Loans
Bank Credits
Leasing
Factoring
others....

4. Loan contract

5. Loan contract
Article 720.
§ 1. By the contract of loan the lender undertakes to transfer to the borrower the ownership of a specified amount of money or of things specified as to their kind only, and the borrower undertakes to return the same amount of money or the same amount of things of the same kind and of the same quality.
§ 2. The contract of loan whose value exceeds one thousand zlotys (PLN) must be evidenced in the document form.

6. Loan Contract’s parties
lender
borrower

7. Bad financial state of borrower
Article 721.
The lender may renounce the contract and refuse to release the object of the loan, if the return of the loan is dubious as a result of bad financial state of the other party. The lender shall not have this entitlement if at the moment of the contract's conclusion he knew of the bad financial state of the other party or he could have learned about it with ease.

8. Case no. 1
The company A (the borrower) concluded on a loan contract with partnership B (the lender). The partnership B has been obliged to transfer to the company A the amount of ,00 PLN within 2 months from the day of contract’s conclusion. On the partnership B got information on sudden and severe financial problems of the company A. As a consequence the lender has decided to renounce the contract. On the the borrower has demanded from the lender the transfer of ,00 PLN. The lender has refused to pay.
Who is right?

9. Claim for release of the loan’s object
Article 722.
The borrower's claim for release of the loan's object shall be subject to limitation upon the lapse of six months from the moment when the object should have been released.

10. Loan’s Return date Article 723.
If the loan's return date has not been determined, the borrower shall be obliged to return the loan within six weeks after the termination by notice by the lender.

11. interest General rule of the Polish Civil Code”
If the interest has not been agreed in the loan contract – there is no obligation to pay the interest
Maximum contractual interest
Article 359.
§ 1. The interest on a pecuniary sum shall be due only where it results from a juridical act or from a statute, from a court ruling or from a decision of another competent body.
§ 2. Unless the interest rate has been stipulated otherwise, statutory interest is due in an amount equal to the guiding rate of the National Bank of Poland and 3,5 percentage points.
§ 2(1). The maximum interest rate resulting from a juridical act may not exceed annually double the amount of statutory interest (maximum interest).
§ 2(2). If the rate of interest resulting from a juridical act exceeds the rate of maximum interest, the maximum interest shall be due.
§ 2(3). Contractual provisions may not exclude nor limit provisions on maximum interest even where the foreign law has been chosen as applicable. In such a case the statutory provisions shall be applied.

12. Bank credit contract

13. Bank credit contract Art. 69 of the Polish Banking Law Act:
By the contract of bank credit the bank undertakes to transfer to the borrower, for the period specified in the contract, the amount of cash for the agreed purpose, and the borrower undertakes to use it on the terms specified in the contract, return the amount of credit used, including interest on specified repayment dates, and to pay the commission on the loan granted.

14. Objective scope of the contract
The bank credit contract should be concluded in writing and specify in particular:
1) the parties to the contract;
2) the amount and currency of the credit;
3) the purpose for which the credit was granted;
4) rules and date of credit repayment;
4a) in the case of a credit agreement denominated in or indexed to a currency other than the Polish currency, detailed rules for determining the methods and dates for determining the exchange rate, on the basis of which in particular the amount of the credit, its tranches and principal-interest installments and the principles of conversion into currency payment or repayment of the loan;
5) the interest rate on the credit and the terms of its change;
6) the method of securing credit repayment;
7) the scope of the bank's rights related to the use and repayment of the credit;
8) deadlines and method of making cash available to the borrower;
9) the amount of the commission, if the contract provides it;
10) conditions for making changes and terminating the contract.

15. Factoring contract

16. The idea of factoring contract – general overwiev
Under a factoring contract, the factor purchases certain business assets – mainly receivables – and provide the business owner some money that they can use to fund and finance the business in the short term.
There are three parties directly involved: the factor who purchases the receivable, the one who sells the receivable, and the debtor who has a financial liability that requires him or her to make a payment to the owner of the invoice. The receivable, usually associated with an invoice for work performed or goods sold, is essentially a financial asset that gives the owner of the receivable the legal right to collect money from the debtor whose financial liability directly corresponds to the receivable asset. The seller sells the receivables at a discount to the third party, the specialized financial organization (the factor) to obtain cash.
The sale of the receivable transfers ownership of the receivable to the factor, indicating the factor obtains all of the rights associated with the receivables. Accordingly, the receivable becomes the factor's asset, and the factor obtains the right to receive the payments made by the debtor for the invoice amount, and is free to pledge or exchange the receivable asset without unreasonable constraints or restrictions