Working Capital Financing

Various forms of funding can be provided for the financing of particular working capital needs. The main categories are short-term loans, credits and overdrafts.

Major Benefits of Short-Term Facilities

Short-Term Loans

Short-term loans can be provided with typical tenors of 3, 6, 9 or 12 months. This type of financing is usually meant for special purposes such as the financing of selected receivables or the financing of investments, the cash savings or returns of which cover full repayment within one year.

Short-Term Credits

Short-term credit facilities are utilized on a revolving basis to provide continuous general working capital financing. Rollover periods within these facilities are usually of 1 or 3 months, depending on the best match for the borrower's receivables cycle.

Treasury Lines

Treasury lines are revolving short-term credit facilities that allow non-standard tenors, i.e. borrowing periods shorter than one month or periods not matching full months. Drawings under this facility are available directly through the Treasury Dealing Room. Because these tenors are not standard, the applicable interest rate depends on the actual money market conditions. The minimum amount drawn under a treasury line is therefore relatively high, since it should be "marketable".

Overdraft Facilities

Overdraft facilities represent a fully flexible form of financing, where drawings do not need to be pre-advised, and they allow the customer to draw funds against its current account up to a specified limit.