Line of credit
What type of product is it?
A line of credit is a flexible type of loan that can be used as needed, by borrowing a predefined amount. The borrower is under no obligation to use the line of credit for anything specific. This product is designed for growing businesses that want to ensure easy access to cash.
What are the special features of this financial product?
- A line of credit can be margined or non-margined
- Margin allows you to vary the amount available each month according to predetermined collateral (e.g., accounts receivable + inventory - accounts payable). If the margin balance becomes higher than the pre-authorized amount, the lender will demand immediate repayment.
- The non-margined margin authorizes no variation in the amount available. Thus, the amount authorized at signature constitutes the amount available for the duration of the agreement. Margins are generally 100,000 $ or less.
- The amount authorized by lenders usually represents 10 % of sales.
- Additional fees may be charged for using certain lines of credit (e.g. registration or administration fees).
What are the advantages of this financial product?
- Can be used only when the company needs it.
- This product offers excellent repayment flexibility, as the borrower can repay the money at any time.
- The borrower can pay monthly interest only on the amount borrowed. The balance can be repaid over time from cash flow.
In addition to answering your questions, our SADC experts can help you make a real analysis of your situation. What's more, an analysis of your long-term needs and the determination of an appropriate financial strategy for your business could be developed at the same time.
See the list of different needs to the right that this financial product can meet. Don't hesitate to apply for financing from SADC. We'll be happy to support you as you think about your project and bring it to fruition.
YOU WISH...
- Acquiring, merging or taking over a company
- Improve your working capital / Growth
- Starting a business
- Developing a residential / commercial project
- Acquiring equipment
- Export your products or services
- Financing your tax credits
- Buying commercial/industrial property
- Turn around the financial situation
- Take equity out of your business
- Robotize / Automate / Improve IT
- Financing a startup
- Improve your company's environmental performance
- Carrying out a group project
- Strategic planning for your company's development
