PowerPoint Presentation (PDF) - Associated Builders and Contractors

Lines of Credit ‐ OperatingOperating / Working Capital Lines of Credit• Used to finance the day‐to‐day operations of the business– Purchase materials or inventory– Pay operating costs –labor, fringes, subcontracts, overhead, etc.• Security:– Accounts receivable– All business assets– Personal guarantees from owners / management / related parties• Terms & Considerations– Interest – generally variable rate (Prime Rate, LIBOR, etc)– Interest rate floors– Commitment fee – unused capacity– Covenants