Services Details
Salaried Loan
A drop-line overdraft (OD) is a credit facility that gives a business the ability to borrow funds up to a specified limit, with the flexibility to draw, repay, and redraw funds as needed within that limit. However, unlike a traditional overdraft or line of credit where the limit remains constant, a drop-line OD has a reducing credit limit over time. The reduction schedule is set when the facility is established.
Key Features of a Drop-Line OD
Service benefits
- Flexibility with Structure: Drop-line ODs offer flexibility in accessing funds but with a structured reduction plan, encouraging disciplined repayment.
- Interest Cost Savings: Since interest is only charged on the amount borrowed, businesses can manage costs by minimizing borrowed funds.
- Gradual Reduction of Debt: The reducing credit limit helps ensure that businesses work toward paying off the facility over time.
