Transaction
Unmargined line of credit for an electrician.
Published financing features
- Unmargined: client can access 100% of funds at all times
- Prime + 0.75%
Published client benefits
- Unmargined facility
- Higher-risk industry funded
- Reduced personal guarantees
- Able to bid on larger contracts
How this kind of financing works
Most commercial lines of credit are margined. The authorised limit is a ceiling, not an amount available: the lender advances a percentage of receivables under ninety days and a smaller fraction — sometimes none — of inventory, recalculated periodically. A business can hold a $500,000 authorisation and find far less than that drawable on any given day.
An unmargined line removes that recalculation. The full authorised amount is accessible at all times, with no borrowing-base report and no availability that contracts because a large customer paid at sixty days rather than thirty. For any business whose receipts are irregular — which is most project-based work — the difference determines whether a contract requiring months of outlay before the first payment can be bid at all.
Prime plus a margin is the standard way these facilities are priced: the rate floats with the lender's prime rate, so the quoted spread is what to compare between offers. Because the lender gives up the protection of the margin formula, approval rests on cash flow quality, consistency of results, and the nature of contracts in hand.
Historical example only. It is not a promise of terms, availability, or results for a future transaction.
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