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Availability Period Facility Agreement

Drawing on a previous contribution to overdrafts, this article focuses on fixed-term loans. A fixed-term loan essentially offers a lump sum agreed over a period of time, usually referred to as a “term,” which requires payment at or until the end of the maturity. These loans usually have a term of more than one year and will often last more than five years. In the case of a fixed-term loan, the borrower is usually allowed to perform a short execution period during which he can claim funds. This is called the “availability period”. Additional funds may be used in stages or “tranches”, as agreed under the Loan Facility and at the discretion of the borrower. Each tranche has its own pre-agreed conditions, which must be met, and a period of availability of its own.

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