In the business world, the fear of non-payment is a constant preoccupation for all sellers. There are a number of guarantees available to secure commercial transactions, but one of them, del credere, is often overlooked despite its effectiveness. Stemming from a long tradition in commercial law, this technique transfers the risk of a customer's insolvency to an intermediary, usually a bank. This article gives you an overview of this mechanism, its forms and its advantages, while the more technical aspects are developed in our dedicated articles.
What is del credere? A definition and its origins
According to a legal dictionary, the name ducroire is a translation of the Italian expression del crederewhich means "of trust". Historically, it was developed in the Middle Ages to secure trade, particularly international trade. Its modern definition is that of an agreement whereby a person, called the del credere, guarantees the proper performance of a transaction and, more specifically, the payment of a debt by a third party, thus acting as guarantor of the latter's solvency. It is therefore a form of personal guarantee, distinct from more familiar civil law mechanisms, whose purpose is to cover the risk of a debtor's default.
In practical terms, an intermediary (a commission agent or a bank) makes a commitment to its own customer, the seller, to pay it on the agreed due date, even if the final buyer fails to perform. This guarantee is particularly appreciated in sectors where payment times are long or where the solvency of a new customer is difficult to assess.
The del credere mechanism and its legal distinctions
The del credere undertaking creates a tripartite relationship between the seller (the creditor), the buyer (the debtor) and the guarantor. It is essential not to confuse del credere with other types of security, as it has its own legal nature and distinct consequences.
Distinction from bonding and credit insurance
Unlike a guarantee, which by its nature is ancillary to the principal debt, and even if the guarantor is joint and several, a del credere is a principal and autonomous undertaking entered into between the guarantor and the seller. The guarantor therefore has no direct link of interest with the debtor, but provides a service to his own client, the creditor. The guarantor is also distinct from credit insurance, with which it may sometimes compete. Whereas insurance is based on a pooling of risks, del credere is a bilateral contract that does not involve this actuarial technique.
Commission agent's del credere and bank del credere
There are two main types of del credere. The del credere commission agent is a commercial intermediary (a commercial agent, broker or other agent, for example) who, as part of his commission mandate, guarantees his principal (the seller or principal) that the customer he has found will pay his invoice. This guarantee obligation is in addition to the seller's initial sales task, and the del credere's undertaking is made in the principal's commercial interest.
A bank del credere is a specific credit technique that falls into the category of banking transactions. According to the French Monetary and Financial Code, it is a signed undertaking by which a credit institution guarantees payment. The bank is not involved in the sale, but offers a financial service to secure the debt. This is the form that offers the most sophisticated arrangements.
Practical applications and benefits for the company
The flexibility of the del credere means that it can be adapted to a wide range of commercial situations, offering significant strategic advantages for a company. Banker's drafts have several advantages practical applications and benefits to secure a commercial operation.
The main forms of banker's draft
This guarantee can take several forms, including :
- Non-recourse discounting (sometimes called discounting) fixed price) : A bank discounts a commercial debt (a bill of exchange, for example) and waives its right to take action against the seller if the buyer fails to pay on the due date. The risk of non-payment is transferred entirely to the bank. It should be noted that this mechanism is very different from traditional discounting.
- Irrevocable documentary credit : Mainly used in foreign trade and exports, this firm undertaking by a bank to pay a seller against presentation of compliant documents is a form of del credere, guaranteeing the exporter against the risk of non-payment.
- Guaranteed payment by bank card: When a merchant accepts payment by card, the cardholder's bank acts as del credere and guarantees payment to the seller, subject to compliance with certain procedures.
- Factoring : A financial services provider (a factoring company), often associated with a banking group, which purchases a company's receivables and guarantees their payment on the due date, even in the event of the customer's insolvency, performs a service that can be analysed as a del credere.
Benefits for the seller
A del credere clause offers a number of advantages:
- Securing sales : This is the main advantage. The seller is protected against the risk of customer insolvency.
- Improved cash flow : By eliminating uncertainty about a receivable, a company can better plan its cash flow and obtain credit more easily.
- Simplifying debt collection : The seller no longer has to worry about late payment or collection procedures for the guaranteed debt.
- A lever for development : This security enables a company to conquer a new market or work with new customers with controlled risk. Customer del credere protection offers a definite competitive advantage, particularly in foreign trade.
The counterparty to this guarantee is the payment of a commission to the guarantor, the price of which varies according to the assessed level of del credere risk and the amount and maturity date of the debt.
Points to watch: conditions and limits
Although effective, del credere is not a guarantee without subtleties. While the del credere obligation makes the guarantor liable for payment, its enforcement depends on precise conditions that must be clearly defined in the contract. The main difficulty lies in the wording of the clause: it must be rigorous to avoid any ambiguity about the scope of the contractual guarantee, the events giving rise to its implementation (simple delay or proven insolvency) and the cases in which the guarantor may be exonerated, particularly in the event of fault on the part of the seller himself. For example, if the seller fails to perform his delivery obligation properly, he will generally not be able to benefit from the del credere. The guarantee will lapse if the claim itself becomes disputable through the fault of the creditor. Understanding conditions and limits of this guarantee is therefore essential before making any commitment.
If you want to secure your trade flows, you need to choose the right guarantees for your business and your customers. Bank del credere is a powerful tool that encourages intermediaries to finalise only the safest transactions, but it requires a good grasp of the legal aspects. To set it up, you need the assistance of a lawyer specialised in banking law is an asset for structuring your commercial operations and negotiating the terms of the agreement with your financial partner. Our firm can help you with this process.
Frequently asked questions
What is the main difference between del credere and surety bonds?
The main difference, well explained in the Civil Code for surety bonds, is the nature of the undertaking. A del credere is a principal and autonomous guarantee undertaking given by an intermediary in his own commercial interest. A suretyship is a contract ancillary to a debt, where the guarantor generally undertakes to provide a service to the debtor.
What type of business is del credere designed for?
It is designed for any company, regardless of size, that sells goods or services on credit. Whether you are a service provider or a distribution company, del credere enables you to protect yourself against the risk of non-payment by your customers. This is a particularly relevant application in foreign trade or with new partners.
Do I need a specific clause to set up a del credere?
Yes, formal acceptance of the del credere commitment must be provided for in an agreement. Whether it is a del credere clause in a commission mandate (binding the principal and his agent) or a specific contract with a bank (as in the case of fixed-price discounting), a written document is essential to define precisely the obligations of the principal and the guarantor.
How much does a del credere guarantee cost?
The guarantor receives a fee known as the "del credere commission". The price is freely negotiated and depends on several factors: the amount of the guaranteed debt, its duration, and the assessment of the debtor's risk of insolvency.
What is the main risk for the seller who benefits from the del credere?
The main risk is losing the benefit of the guarantee through one's own fault. If the seller fails to perform the contract properly (e.g. fails to deliver, product does not conform), the guarantor may refuse to pay, as the claim itself would be open to challenge.
What is the main advantage of a bank del credere?
Its main advantage is the certainty of payment on an agreed date. It transforms an uncertain receivable on the customer account into an almost certain cash inflow, which ensures the stability of the company's balance sheet and facilitates its financial management.
EN 
FR