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A Credit Policy sets the rules and guidelines for how an organization handles lending decisions and manages credit risk. In Austria, these policies must align with the Banking Act (BWG) and European banking regulations, helping businesses make consistent, legally sound decisions about who they lend to and under what terms.

Think of it as your organization's playbook for credit decisions - it covers everything from customer evaluation criteria and payment terms to collection procedures and default management. Austrian companies use credit policies to protect themselves while maintaining healthy cash flow, with specific sections addressing local creditworthiness assessment standards and consumer protection requirements under Austrian law.

Use a Credit Policy when your business starts offering payment terms, loans, or any form of credit to customers. Austrian banks and financial institutions need this document before they can begin lending operations, as required by the Banking Act (BWG). But it's equally valuable for regular businesses extending payment terms to clients.

The right time to create or update your Credit Policy is before expanding credit offerings, when entering new markets, or after changes in Austrian financial regulations. It's especially crucial when your organization faces increasing payment delays, customer defaults, or needs to standardize credit decisions across different departments or branches.

• Basic Credit Policies: Cover standard lending criteria, payment terms, and collection procedures - commonly used by small to medium Austrian businesses
• Banking Credit Policies: More complex documents following BWG requirements, including detailed risk assessment frameworks and Basel III compliance measures
• Commercial Credit Policies: Tailored for B2B transactions, focusing on trade credit terms and corporate customer evaluation
• Consumer Credit Policies: Specific to retail lending, incorporating Austrian consumer protection laws and EU consumer credit directives
• Industry-Specific Policies: Adapted for sectors like manufacturing or real estate, with unique credit assessment criteria and risk parameters

• Credit Managers: Oversee daily credit policy implementation, assess credit applications, and maintain risk standards
• Financial Directors: Develop and approve Credit Policy frameworks, ensuring alignment with Austrian banking regulations
• Legal Counsel: Review policy compliance with BWG requirements and EU directives, update terms as regulations change
• Risk Officers: Monitor credit exposure, suggest policy adjustments, and ensure proper risk management
• Account Officers: Apply credit criteria to customer applications, handle credit limit decisions
• Internal Auditors: Verify policy adherence and recommend control improvements

• Business Assessment: Review your organization's credit needs, risk tolerance, and current customer payment patterns
• Regulatory Review: Gather current Austrian Banking Act requirements and EU credit regulations that apply to your sector
• Industry Standards: Research typical credit terms and risk assessment criteria in your industry
• Internal Processes: Document your existing credit approval workflows and collection procedures
• Risk Parameters: Define clear credit limits, evaluation criteria, and default triggers
• Template Selection: Use our platform to generate a customized Credit Policy that meets Austrian legal requirements
• Stakeholder Input: Get feedback from finance, legal, and operations teams before finalizing

• Purpose Statement: Clear objectives and scope of credit operations under Austrian law
• Credit Assessment Criteria: Detailed evaluation parameters aligned with BWG requirements
• Risk Classifications: Defined risk categories and corresponding credit limits
• Documentation Requirements: Required financial statements and credit history checks
• Credit Terms: Payment conditions, interest rates, and late payment consequences
• Collection Procedures: Step-by-step default management process
• Data Protection: GDPR-compliant information handling procedures
• Review Process: Regular policy evaluation and update procedures
• Authority Matrix: Approval levels and decision-making hierarchy

A Credit Policy differs significantly from a Credit Agreement. While both deal with credit matters, they serve distinct purposes in Austrian business and banking operations.

• Scope and Purpose: Credit Policies set company-wide rules and standards for all credit decisions, while Credit Agreements are specific contracts between lender and borrower for individual transactions
• Legal Nature: A Credit Policy is an internal governance document, whereas a Credit Agreement is a legally binding contract enforceable under Austrian civil law
• Content Focus: Policies outline evaluation criteria and risk management procedures; Agreements detail specific loan terms, interest rates, and repayment schedules
• Duration: Credit Policies remain active until formally revised, while Credit Agreements have fixed terms and expiration dates
• Regulatory Context: Policies must align with BWG banking regulations broadly; Agreements must meet specific Austrian consumer protection requirements