Ledgered Credit Lines
A ledgered line of credit is ideal for a
company that is presently working under a bank credit line but is
struggling with the requirements, financial covenants and other
restrictions that are common with a traditional line of credit.
A lot of companies don't realize at the
time of securing a bank or traditional line of credit that if the
company's financials or circumstances changes in anyway that the
line of credit may become useless and burdensome as
they may have to scramble to have it replace.
A ledgered line has similar ABL line
structure but without the requirements, financials covenants and
restrictions of a traditional line.
A ledgered line of credit offers
flexibility, there are no financial audits, no covenants with
respect to ratios, concentration, etc.
As for costs, it is very similar to a
traditional line pricing, typically prime + %, plus a service fee.
The service fee is charged monthly on the gross amount of
invoices, interest is charged on the amount of funds actually
drawn, thus controlling the cost of funding.
The process is simple, the company submit
invoices, it creates a pool or borrowing base, then draws a
percentage (up to 95%) depending on the advance rate. The client
can draw funds, daily, weekly, bi-weekly, or monthly. Funding is
based on the value of their receivables, providing constant
capital based on sales.
For more information on a ledgered line of
credit, just
complete this short form.
The office that handles your area will get back to you shortly.
