That's right.
A Business Line of Credit (BLOC) is a longer-term, revolving facility that clients can use for business expansion or investment purposes. It provides clients with the flexibility to use the facility for medium to long-term cash flow purposes.
As a BLOC is a revolving facility, pricing will require a client to pay the following:
- an establishment fee to set up the account,
- an interest rate based on our cost of funds, and
- a line fee on the overall limit which ensures they can have access to their money 24/7 and also covers things such as capital charges and operating costs.
Line of Credit
Rate Build-Up
Rate
Not quite.
Although an Overdraft is a revolving facility, it is designed for short term cash flow needs only and is not ideal for long term revolving debt (line of credit) type lending.
Not quite.
A Bank Guarantee is not appropriate in this scenario as it is a contingent liability. It is used when a borrower needs to guarantee certain terms to a third party. A Bank Guarantee is called upon by the favouree when the borrower fails to meet the agreed terms.
