Here's how it works
- You specify the amount you want to finance. This depends on your capital spending plan and/or quotations, and on the resources that you can invest yourself.
- The roll-over credit is an alternative to a standard investment credit. You use it to finance an investment. We’re talking about a credit line here, which means you're entitled to draw down an agreed amount, but are not obliged to do so.
- Whenever you draw down an amount up to the agreed maximum amount, you do so for a fixed period, such as three months. At the end of those three months, the full amount drawn down is automatically repaid from your own account, and you can draw down a new amount if you so wish.
- You roll over from one drawdown into the next, so to speak – hence the name 'roll-over' credit. The moment you pay back the amount is called the 'roll-over date'. Once you pay it back, you have the opportunity at that point to switch your roll-over credit to a standard investment credit.
Here's how much it costs
You open the credit line for an agreed maximum amount to be drawn down, and for an agreed term measured in years.
- This is done at a transparent rate, namely the EURIBOR, an interest rate whose value is published every day in Belgian financial newspaper, De Tijd.
- On top of the EURIBOR, you pay a drawdown fee* and a credit margin, expressed as a percentage. This margin is set at the time you open the credit line and is fixed for the entire term.
By way of clarification: you only pay interest on the amount drawn down for the period in which it was drawn down. This means that you don't pay interest on the full credit line if you don't draw it down in full. You pay a small fee, called the credit line fee, for any amount that you do not draw down.
*The drawdown fee is a small fee to cover the processing costs involved in a drawdown.
What happens when you draw down an amount?
From the beginning, you have access to a maximum amount that you can draw down. But it's entirely up to you how much you draw down and you only take an amount when you need to.
Any amount you draw down becomes available on your account for an agreed period. Generally, this is for three, six or 12 months. At the end of the period you pay the amount back, plus the EURIBOR interest and the credit margin. As soon as you repay the amount due, you can start drawing down again on the same day.