Operation that is carried out by banking institutions in which they acquire promissory notes or bills of exchange, discounting from the nominal value of the note the equivalent of the interests that it will generate between its issue date and its due date.
Through commercial discount, a financial firm (bank, savings bank or credit institution) advances to a client the amount of a credit that is not due yet, and that generally is the result of the sale of goods, supplies or services to a third party. The financial firm will then be the one to manage the collections of the nominal value of the credit to the client of the enterprise. The firm, however, does not assume the risk of default of the debtor.
In these transactions, a part of the collection rights of the enterprise, that must be duly documented with bills of exchange, promissory notes, bills or receipts, is handed over to a financial firm. In return, the financial firm pays in advance the nominal value of the collection right minus the management costs and the interests generated by the operation.
The financial firm does not assume the risk of default, that is to say, if the debtor does not pay those bills, the costs are borne by the client. In the case that the third party, client of the enterprise, does not make the resulting payments, the financial firm will charge the debtor the amount of the credit plus a fee.