What is an accordion debt?
A debt accordion, also known as an incremental facility, is a provision that allows a borrower to expand the maximum amount allowed on a line of credit (LOC), or to add a term loan to an existing credit agreement.
What is an incremental loan?
A feature of some loan agreements that allows the borrower to add a new term loan, tranche, or increase the revolving credit loan commitments under an existing loan facility up to a specified amount under certain terms and conditions.
What is upsizing a loan?
Upsized Loan means a loan made in respect of each of the Upsized Vessels pursuant to this Agreement or any of the principal amount outstanding from time to time of that loan, or, if the context otherwise requires, the total principal amounts outstanding under the Agreement in relation to the Upsized Vessels.
Is revolver loan same as line of credit?
Though revolving credit and lines of credit have similarities, there are some differences. Revolving credit remains open until the lender or borrower closes the account. A non-revolving line of credit, on the other hand, is a one-time arrangement, and when the credit line is paid off, the lender closes the account.
What is a swing line facility?
A swingline facility is a sub-limit of a syndicated revolving credit loan whereby a lender makes a short term (operating not more than five days) loan, in smaller amounts, on shorter notice, and with a higher interest rate than is otherwise available for revolving credit loans.
Is a revolving account good?
Revolving credit accounts can have high interest rates, and you may be able to borrow more than you can afford to repay. If you don’t plan well, you may wind up with high-interest debt that can be difficult to pay off. Make sure to monitor your spending and hatch a plan to pay off what you borrow, on time and in full.2021-07-23
What is a accordion facility?
An accordion feature is a type of corporate option or a clause in a loan (or a syndicated facility) agreement that allows a company to increase its line of credit (i.e. the principal amount under the agreement) or other liabilities with a lending financial institution.
What is a Swingline loan?
Related Content. A swingline facility is a sub-limit of a syndicated revolving credit loan whereby a lender makes a short term (operating not more than five days) loan, in smaller amounts, on shorter notice, and with a higher interest rate than is otherwise available for revolving credit loans.
Which is better term loan or revolving loan?
Term loans provide the stability of fixed repayments and a predetermined repayment schedule. Fixed and variable interest rates are available for both types of loans. Term loans are better suited for long-term fixed asset investments, while revolving loans are better suited for short-term working capital needs.2021-08-18
What is incremental debt?
Incremental Debt means Indebtedness of the Issuer other than (a) Indebtedness under the Indentures (excluding any Additional Notes), (b) Required Swap Debt and (c) Refinancing Debt.
Is a revolving loan good?
To maintain a good credit score, it’s important to have both installment loans and revolving credit, but revolving credit tends to matter more than the other. Installment loans (student loans, mortgages and car loans) show that you can pay back borrowed money consistently over time.
What does it mean when a loan is revolving?
A revolving line of credit refers to a type of loan offered by a financial institution. Borrowers pay the debt as they would any other. However, with a revolving line of credit, as soon as the debt is repaid, the user can borrow up to her credit limit again without going through another loan approval process.
What is an accordion in loan?
Also known as an accordion feature. A feature of some loan agreements that allows the borrower to add a new term loan, tranche, or increase the revolving credit loan commitments under an existing loan facility up to a specified amount under certain terms and conditions.
What is the biggest advantage to a revolving credit loan?
One of the advantages of having a revolving line of credit is that the approved maximum amount of credit is available whenever needed. Therefore, you don’t need to go through a lengthy approval process to get a critical injection of cash. Instead, you’ll simply borrow from your existing line as needed.2022-02-09
What is an accordion on a line of credit?
An accordion feature is an option that a company can buy that gives it the right to increase its line of credit (or similar type of liability) with a lender. Companies typically purchase an accordion feature in anticipation of the need for more working capital for possible expansion opportunities.
What’s an example of a revolving loan?
Examples of revolving credit include credit cards, personal lines of credit and home equity lines of credit (HELOCs).2019-11-11