Bill Facility
Usually a term facility, i.e. 1 year, 2 years or 3 years. Use as required for medium term working capital financed by 90 day, 120 day or 180 day bank bills.
Interest rate varies with short term money market rate each time a bill is discounted.
The bank charges an interest margin over the Bank Bill Rate (BBR) depending on the risk status of the borrower.
Banks charge a per annum line fee as a percentage of the loan facility and interest on funds drawn.
Every time a bill is drawn in effect a new loan is established and when it matures, the principal amount of the bill is repaid.
Bills are ‘discounted’ – i.e. the interest is deducted up front from the principal amount advanced.
Bills are used generally by companies which have intermittent/less regular working capital requirements e.g. property developers making progress payments under building contracts.
A Bill facility is often part of a long term loan package of larger companies comprising a fully drawn loan, overdraft and bill facilities.
BizExchange understands that whether you are buying or selling a business, business financing is a likely consideration. We also know that finding the right person at the bank to deal with your issues is not always as easy as it should be.
This is why we have established relationships with a range of financial providers so that you can complete one form and have it received by the right person at each of the institutions you have nominated. Not only that, we know their lending criteria, so we will only present you with the banks that are prepared to consider your application.
