Alennuskyky

Alennuskyky refers to the ability of a financial institution, typically a bank, to reduce the face value of a debt instrument, such as a bill of exchange or promissory note, before its maturity date. This process involves purchasing the debt at a price lower than its face value, thereby providing the holder with immediate cash. The difference between the face value and the purchase price represents a discount.

This practice is a form of short-term financing for the seller of the debt. For instance, a company that has a receivable due in 90 days might approach a bank and request alennuskyky. The bank would assess the creditworthiness of the debtor and the risk associated with the note. If approved, the bank would pay the company a sum equal to the face value minus a pre-determined discount rate multiplied by the time remaining until maturity.

The discount rate is influenced by factors such as prevailing interest rates, the credit quality of the debtor, and the remaining term of the debt. Higher risk or longer maturity generally results in a higher discount rate. Alennuskyky is a common practice in money markets and is crucial for managing cash flow for businesses. It allows companies to access funds without waiting for their customers to pay, facilitating operations and investment.