Even the most successful businesses can run into unexpected costs from time to time. Maybe you need to restock your inventory, replace a key piece of equipment or bridge the slow season. At times like those, an Authorized Overdraft (AOD) or a Line of Credit (LOC) can provide peace of mind while your finances catch up to your circumstances.
AOD and LOC Benefits:
- Reusable safety net – once you pay down your debt, you can use it again.
- Only pay interest on what you use – usually at lower rate than a credit card.
- Save money - as your business earns profit share on the loan interest you pay.
Authorized Overdraft (AOD)
An Authorized Overdraft is revolving credit connected to your business chequing account that allows your withdrawals to exceed your deposits up to a pre-determined amount. You pay on your AOD every time you deposit to your chequing account.
Line of Credit (LOC)
A Line of Credit is a revolving loan with a flexible repayment schedule. This allows you to re-advance money on the LOC without re-applying each time, as long as the amount borrowed does not exceed the pre-determined credit limit.