If the borrower decides to use his right to deduct during a period of availability, he must inform the lender (usually two or three days notice) in order to allow the lender to obtain the necessary funds. The borrower must choose the first interest period. At the end of the interest period, the borrower pays interest on the amount borrowed and chooses the next interest period. In the case of a temporary loan, the borrower is generally allowed to make a short turnaround period in which he can withdraw funds. This is called the “availability period.” Additional credits may be used in increments or in tranches, as agreed as part of the loan facility and at the borrower`s discretion. Each tranche has its own pre-agreed terms, which must be met, and its own availability period. If no credit is deducted during the corresponding availability period, these funds will no longer be available and the commitment will be automatically cancelled. The use of the tranches provides the borrower with greater flexibility and control over the amount of money borrowed and hence the interest paid. Based on a previous overdraft contribution, this article focuses on long-term loans. A long-term loan is essentially a lump sum agreed over a fixed period, usually referred to as “term” and requires payment at the end or end of the period. These loans typically last longer than one year and will often last more than five years. Long-term loans are generally facilities. A “linked” facility is a facility where the lender, after the execution of the facility contract, is required to transfer money when the borrower requests it, provided that the borrower meets certain pre-agreed terms.
The loan is repaid in accordance with the repayment plan contained in the facility agreement. The most common repayment methods are: one of the characteristics of a long-term loan is that once repaid, it generally cannot be repaid, unlike a revolving credit facility (considered next month) or an overdraft. A temporary loan gives the borrower the guarantee of a fixed repayment plan. This contrasts with the character at the request of an overdraft. A commitment fee may be due for a temporary loan, as these are facilities incurred. The commitment fee is calculated as a percentage of the unused funds that the lender has promised to the borrower from time to time. The royalty covers the lender`s costs of providing funds for the loan, which it is then unable to lend to anyone else. “In general, this service is wonderful. I think the flow of labour law information is very useful and relevant. The quality of the items is generally quite good. The website offers a way to do quick research on various labour law issues.
In addition, the borrower may, after a sufficient announcement, pay all or part of the loan in advance (i.e. before the dates indicated in the repayment plan), for example because he no longer needs as much money as he borrowed it first. It may have to pay a royalty to the lender to compensate for the interest shortfall the lender would have received if the money had been pending; this tax is called a “down payment fee.” The use of tranches provides the borrower with some flexibility, which can be further increased if the borrower allows the borrower to obtain money in different currencies. The interest on a long-term loan is probably less than the interest paid in the event of an overdraft and is either fixed at a fixed interest rate or, more generally, at an amount (known as a “margin”) above the corresponding LIBOR (London Interbank Offered Rate).