Washington - Equipment, Real estate, Accounts receivable and Inventory.
These are all good forms of collateral if your business is looking for a bank
loan. But if you're finding yourself a little short of these assets maybe you
can make up the difference with a little cheese.
Cheese happens to be an acceptable form of collateral if
you're seeking a loan from Credito Emiliano bank in Italy. Take Mauro Rossi, for
example. His small business Gavesetto produces about 20 000 "wheels"
of Parmigiano-Reggiano (the so-called "king of cheese") in the
Emiliano region of Italy
every year.
According to a video by Great Big Story, when cheese
producers like Mauro need a loan they often go to Credito Emiliano. What kind
of collateral does Credito Emiliano accept? Well, you've likely figured out by
now that besides the typical forms, it also takes wheels of cheese.
Read also: Zimbabwe to use livestock as loan security
In this part of the world, cheese is a serious asset.
Parmigiano-Reggiano cheese, for example, needs to be aged 18-36 months. Just
one wheel could be worth thousands of dollars, so it's not a bad investment for
a bank.
"We are a traditional bank active in supporting
Parmigiano-Reggiano producers," Fausto Filippi, a banker from Credito
Emiliano said in the Big Story report. "The decision to use
Parmigiano-Reggiano for this type of credit program is simply due to the fact
that this is a typical product that is unique to this area."
Talk about a bank that knows its customers and understands
their inventory.
One problem is storage, this is cheese and it needs to be
kept under very precise conditions. A vault or a cash drawer will simply not be
acceptable. So instead the bank uses the special cheese warehouse of Tagliate
General Warehouses , another small business who specializes in this kind of
thing.
Tagliate's warehouses are filled with about 360 000 wheels
of the stuff, valued at more than 160 million Euros. Their job is to protect
the collateral, literally from cow to the bank. Who knew so many people could
make money off a wheel of cheese?
Creative financers like Credito Emiliano, come up with
innovative ways to help their clients grow. You wouldn't think of cheese as a
form of collateral. But it is. Who knows what other forms of collateral your
bank might accept to secure your next loan?