Employees’s annual holiday allowances and year-end bonuses (including social security contributions and payroll withholding tax) are all annually recurring costs for your business. A KBC Cash Budget Credit Facility lets you spread these costs over the whole year, relieving you of the temporary strain they can put on your business's cash flow.
What is a cash budget credit facility?
- Clear initial amount and a fixed repayment schedule
- Term of no longer than 12 months
- Repay monthly, every three months, every six months or once off in full
Financing holiday allowances
As an employer, you'll have holiday allowances to pay to your staff. You can do just that with one of our cash budget credit facilities.
You have to pay holiday allowances directly to white-collar
employees before the summer holidays. You can use a KBC Cash
Budget Credit Facility to finance the double holiday allowance (92% of
gross monthly salary).
The holiday allowance for your blue-collar staff must first be paid to the National Office for Social Security (RSZ), which in turn transfers the money to the authority that pays the holiday allowance to those employees. You can use one of our cash budget credit facilities to finance the annual employers’ contribution of 10.27% of wages for the year in which the holidays were earned (at 108%).
Financing year-end bonuses (13th month)
If you pay your staff a year-end bonus, you can finance this with a KBC Cash Budget Facility.
Contact your KBC branch in good time when applying for this facility, i.e. ideally in October (for financing payment of the 13th month) and in April (for financing payment of holiday allowances).
How it works
You decide the amount to be financed, based on the amount calculated by the social-accounting secretariat. As soon as we make your KBC Cash Budget Credit Facility available to you, the amount is credited to your current account so you can effect payment. Repayments are deducted automatically from your KBC Current Account
How repayment works
Repayment normally begins after the first drawdown of the credit, unless you have a grace period to postpone the first repayment. During this period, you pay the interest, but you don’t have to repay any principal.
Make repayments in equal amounts or equal instalments of principal
- If you opt for repayments in equal amounts, the periodic
repayments (i.e. principal + interest) will always be the same. To
make that possible, you repay mostly interest and not so much
principal at the start of the term of the loan. Towards the end of
the credit period, the ratio changes and you repay more principal
and less interest.
- If you opt for equal instalments of principal, you repay the same amount of principal on each due date. Interest is calculated on the outstanding principal, so the instalments you have to pay (i.e. interest + principal) reduce over time. This is what we call decreasing repayments.
With your cash budget credit facility, you can protect your family or
company financially by taking out optional death cover.
Read more about the insurance here.
Remission of debt insurance
Protect your family or company with life insurance linked to your business credit facility. The full debt is waived if you die.