WORKING CAPITAL REVOLVING LOAN

  • You can pay selected invoices earlier and get better terms
  • The exact interest on each tranche is known ahead of time
  • You can use the loan in foreign currencies

PRODUCT INFORMATION

A revolving loan is a purpose-bound loan for financing the operating needs of your company. It is primarily useful due to the extended maturity of your trade receivables and the inventory turnover time. It offers you the following benefits:
  • You can set the overdraft limit according to your needs.
  • You request the loan and repay it in tranches, and one tranche can be repaid by taking out another – exactly as you need based on the maturity of your receivables.
  • The loan can also be used for financing contracts, i.e. for the combined financing of inventory purchase and the period until the maturity of your receivables.

Revolving loans can be combined in a single multi-product agreement with overdrafts, bank guarantees and letters of credit so you have a single limit available for various products.

Revolving loans are offered in contractually agreed periods called tranches. Their length is usually from 14 days to 3 months. The amounts are determined:

  • by a contractually agreed limit in the absolute value
  • by a contractually agreed limit depending on the value of receivables or inventory

In addition to CZK, the loan can be used in other currencies (EUR, USD). The interest rate is usually set as the sum of PRIBOR, LIBOR, LIBOR in EUR, or EURIBOR for the given interest period and a fixed surcharge in percentage points p.a.

The maturity of the loan is usually one year, and the loan can be extended.
The loan is usually secured by your trade receivables. The bank will explain the specific security requirements upon analysing your financial results.

The overdraft can be provided on the basis of a separate agreement, or as a line of credit
(separately or along with other products, e.g. overdrafts or trade financing products – guarantees, letters of credit). Combining these products into a single line of credit is conditioned upon their having the same maturity and security.

Requirements

  • The applicant is authorised to do business in the Czech Republic.
  • Approval of the loan application. We usually require standard documents to accompany the loan application, typically, financial statements, an annual report, an auditor’s report (if any), etc.
  • Signing a loan agreement.
  • Satisfying the conditions precedent.
  •  To take out the loan or to renew it, you usually have to submit:
    • an application stating the requested amount of the loan for the next period and the length of that period;
    • an offer of receivables or inventory as security.