Life provides us with many surprises, sometimes unpleasant. Flooded apartment and the need for expensive renovation is a situation that almost all of us have encountered.
The question then arises: where to get money for renovation? It is better to go to the bank and expose yourself to high interest rates, or can you find another way to get the amount we need? Today, we will take a closer look at loans provided by workplaces. See what a company loan is.
Company Social Benefits Fund – what is it?
In any situation, when we need money for housing purposes, we can apply for a loan to the Company Social Benefits Fund (ZFŚS) – this is specified in the Act of March 4, 1994. If our expenses do not relate to the apartment in any way, despite the difficult financial situation, a loan from this fund may not be granted to us – the type of social activity that is carried out under the fund is determined by the employer. We must remember that frequent loans for large amounts can damage the company’s budget, which is why in practice the loan is granted for the purchase or renovation of an apartment.
The loan can be interest-bearing or interest-free, and returnable or non-returnable (it all depends on the provisions in the regulations).
What is housing aid and company loan granted for?
The funds from the fund can be used for almost everything related to a residential premises. We can apply for a loan from a workplace if we want to build, buy or buy a dwelling.
This also applies to the renovation of an apartment, the adaptation of a room for residential purposes and the adaptation of the premises to the needs of a disabled person. Even if the building contribution is completed in a housing cooperative, we can apply for such a loan.
Regulations – what should they contain?
Every employee applying for a loan from an employer should have access to the terms of such a loan. Before signing the contract, we should carefully read the regulations, which specify the type of assistance provided under the Company Social Benefits Fund and the general conditions for granting loans. The regulations are set by the employer together with the company trade union organization, and if there is none, with a representative chosen by the employees. We will exchange what information should be included in such a document:
- maximum repayment period and conditions for a possible extension of this period (e.g. in the event of a difficult financial situation of the borrower)
- possible interest rate
- maximum loan amount
- terms of debt cancellation
- method of documenting expenses (assistance from the Company Social Benefits Fund is purposeful, and the employer as the fund administrator must have evidence as to the proper use of its resources)
- loan surety
- proceedings in the event of termination of employment
- deadline and procedure for examining loan applications
- rules for granting loans
- how to proceed in the event of loan default
- documentation requirements
An attachment to the regulations should be a model contract.
Contract and company loan
The purpose of the contract is to specify the general principles of the loan, which are contained in the regulations of the Company Social Benefits Fund. The contract should therefore specify information such as the amount of the loan granted, the repayment period, the number of installments and the purpose for which the borrowed money must be used.
Very often, the contract also includes a clause specifying the conditions for the employee’s release from debt repayment. The contract also does not lack information on how to transfer funds to the borrower (usually it is the bank account number to which the employee receives remuneration for work).
The document should also contain information about the date when the employee delivers certificates or receipts confirming the purpose of using the funds from the fund.