Yrityslaina is the generic term for a type of commercial debt instrument – a promissory note – that exists in the business world today. A commercial bond is simply a financial bond issued by an issuer for various reasons including to obtain financing for various projects, M&A, and more importantly, to expand existing business. The word is generally applied to longer term debt instruments, typically with a maturity of more than one year.
Yrityslaina is derived from two words that pertain to the financial markets: Yrity (y) and Sinun (s). The Yrityslarna refers to the ability of the borrower to collect payments based on performance of the lenders in respect of Yrityslarna. The Yrity contract (the underlying asset securing the loan) is called a Yrity plank. There are three sub-pens that are common in commercial debt instruments:
Yrityst Si (or Yritysin) is the second sub-pens of the Yrityslaina. The Yrityst Si allows the lender to assess the value of the property underlying the loan. The Yrityst Si can be satisfied through different processes including the sale of a property, assignment of a deed, and transfer of trust deeds or other types of ownership. The terms “pledged” or “subject to” are frequently seen in Yrityst of contracts.
Yrityslaina is a legal term that pertains to the right of the holder of a Yrityslaina to take payment of taxes, service charges and interest and principal balance of the loan even when the borrower has already paid his/her share of taxes and interests. In other words, a Yrityslaina also gives an entitlement to the tax man. This is how it came up with the name of “ILman.” A Yrityslaa is usually a deed of trust that is used as security for a loan. However, it does not restrict the borrower from paying any taxes.
It is clear from the foregoing that there are two distinct types of Yrityslaina that are prevalent in Indonesia. The first is the Yritysligan line, or “asset trust.” Under this type of trust, the lender is obliged to reimburse you the total amount of money lent plus interest, principal, and interest plus fees if you default in your payments. You will be liable for the interest on your outstanding balance until such time that the full amount of your loan is repaid. If you pay the full amount, then the asset belongs to the lender. It means that the Yritysligan is simply a deed of trust, and not a simple lien.
The second type of Yrityslaina is the Yritysligan key, or “freehold property.” Under this type of trust, the borrower has the ownership of the freehold property as of the date of signing the agreement. The owner of the freehold property can now rent out the property according to the terms agreed upon by the borrower and the owner. The borrower is then responsible for repaying the owner in case the lease or agreement is not renewed after its expiry. The advantage of the freehold property is that the lender does not have to undergo the tedious procedure of foreclosure or even bankruptcy of the debtor.
A third type of Yrityslaina is Yrityslainnansetse Privatum, or “Privatum to the Private Liason of Kuten.” This Yrityslaina is a deed of trust, and thus, protects the loan or deed from any kind of creditors. It also protects the lender in case there are no other possible sources of funding, thereby sparing the lender from incurring any losses. Private lessons to the private litor generally have higher interest rates than normal loans to the person, as well as longer repayment periods.
There are three types of Yrityslaina certificates that one can acquire, all based on whether one is a borrower or a lender. However, the certificate obtained through the private arrangement, called tarvitaan de taipo, or “caravanserai yritysligan,” is by far the best choice for a tourist in Sri Lanka. A number of hotels, restaurants, and other establishments in Sri Lanka issue these tarvitaan certificates, which allow tourists to enjoy the sights, sounds, and tastes of the country without having to worry about paying hefty amounts of money for visas or doing background checks. Tourists may also choose to purchase a Yrityslaina for personal use or exchange them between friends and family members.