Revolving Credits / Overdraft
This is usually structured as a short-term facility where a customer is required to repay each drawing by a fixed period of time, usually from 30 days to 180 days. It is usually given to finance a company’s permanent working capital and is ever-green for the period of the total facility. The tenor of the facility does not exceed three (3) years.
It is a line of credit that allows a customer write cheques for more than the actual
balance on the account with a finance charge on the excess. It is an open credit which
can be used repeatedly until the balance on the account reaches a certain pre-arranged
limit with a specific repayment date, usually one year.