These arrangements are totally flexible, so if you only need to access your drawdown facility once or twice, then that’s no problem.Ī business’s needs change over time. However, if you decide you don’t need to borrow any additional amounts, then that’s fine. For example, if your drawdown facility has a limit of £5,000, you might borrow £1,000 initially, but you can still return and borrow a further £2,000 three months later, or £3,000 six months later – indeed you can access any amount up to your drawdown limit, all without needing to arrange a new credit facility. In a nutshell, you borrow what you need, when you need it. The flexibility of drawdown arrangements is perhaps their most attractive feature. Then, when you’ve repaid the original borrowing, you might start thinking about whether you need to access any more funds. The daily interest rate might be somewhere between 0.05% and 0.1%. ![]() After making a withdrawal, you might then repay the amount borrowed, plus interest, over several months. This means that it’s effectively a form of ‘revolving credit’ arrangement.Ī drawdown agreement might typically have a term of 12 or 24 months. ![]() ![]() However, instead of receiving the loan amount as a single lump sum at the start of the agreement, it allows you to borrow differing amounts at different times throughout the term of the agreement. Simply speaking, a drawdown facility is a type of business loan.
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