Working capital financing

Working capital financing, also known as business credit, is a solid solution when you want to:

• Deal quickly with expected and unexpected cash shortfalls
• Boost your working capital by means of a financial buffer
• Keep your own cash resources free for other purposes

You can use a line of business credit in two ways:

Advance in current account
An advance in current account is a flexible way to overdraw your business account up to a certain limit. It is suitable if you want to quickly overcome unexpected cash shortfalls.

Straight loan
A straight loan enables you to draw down one or more fixed amounts that KBC has transferred to your business account for a certain length of time. This facility is useful if you can estimate in advance how much you need and when you can pay it back. The loan’s term is at least seven days and no longer than a year.

General

• It gives you the ability to quickly and easily deal with changing capital needs and temporary cash shortfalls. You have a financial buffer for your working capital at all times
• You can draw down your business credit in two ways, enabling you to fully tailor it to your working capital needs
• It allows you to pay your suppliers in cash, which often results in you receiving a discount
• You can give your customers more time to pay
• You can manage everything entirely digitally in KBC Mobile, KBC Touch and the KBC Business Dashboard
• If you need a bit more budgetary elbow room than usual, you can apply for a higher credit limit

Advance in current account

• Money that goes into your business account is used to repay the amount drawn down
• You don't need to submit any proof of investment
• You only pay interest on the amount and the days you’re overdrawn and the interest charged is tax-deductible

Straight loan

• You can decide the maximum amount to be drawn down (credit limit) and for how long
• You can draw down straight loans at any time, provided you stay within your credit limit
• Interest and charges are both tax-deductible
  

The limit for your line of business credit is determined on the basis of your financial plans and operational needs:

• You can go overdrawn with an advance in current account starting from 6 000 euros right up to the agreed credit limit
• You can also draw down straight loans starting from 25 000 euros

You can calculate your working capital financing in KBC Mobile, KBC Touch and the KBC Business Dashboard.

If you require fewer funds (no more than 5 000 euros), you should go for a KBC Business Budget Facility.

Blanket fees

• Credit line fee
  To draw on this credit line, you pay a fee every three months, which is calculated for the average amount of the line of business credit (or the largest amount drawn down, if larger).
• Credit origination fee
  For drawing up the credit contract, you will be charged a one-off origination fee based on the amount of credit granted.
• Management fees
  You pay a fixed amount every three months for the management of the facility.

Advance in current account

• Interest rate
  The rate is set based on an agreed reference rate plus the agreed margin. The interest rate or reference rate can never be negative. The interest payable is charged to your account at the end of each calendar quarter.
  
• Additional interest
  If you, exceptionally, draw down an amount over and above the credit limit or you use the advance in current account for longer than the agreed term, you pay additional interest on the amount in question for as long it is overdrawn. The relevant reference rate, the margin and the overdraft rate are set out in the credit contract.

The amount or the percentage, as well as the method of calculating the above fees and charges, are set out in the credit contract (including the General Credit Terms & Conditions).

Straight loan

• Interest
  We set the interest rate when the loan is being drawn down. This rate is based on the EURIBOR plus a margin.
  You have the certainty of knowing the interest rate to be charged on the date the straight loan becomes due. You only pay interest on the amount you draw down
• Drawdown fee
  Each time you draw down a straight loan you pay a drawdown fee.
  
• Default interest
  If there are no or insufficient funds on your account on the date the straight loan is due, we will charge default interest on the principal due at that time.
  

If you want to finance your working capital by means of a business credit, you can apply for, sign, track and manage your credit facility digitally using KBC Mobile, KBC Touch and the KBC Business Dashboard.

You can also ask Kate, your digital assistant, to help by heading to the top-right corner of KBC Mobile. Just say: ‘I want to apply for a business credit’.

Decisions on business credit facilities of up to 150 000 euros should be available within 24 hours of applying online or by appointment, provided your application is complete.

Advance in current account
You draw on this facility by going overdrawn on your current account. The income you receive on your account is then used to clear the amount overdrawn.

Straight loan
After your application is approved, KBC will transfer the funds to your business current account. You can draw them down as straight loans in KBC Mobile, KBC Touch, the KBC Business Dashboardor through your KBC Bank branch.

Under KBC Remission of Debt Insurance, KBC Insurance will pay off the negative balance on your KBC Current Account (the one to which the credit is linked) in the event of your death. That way, your family will be protected if you die during the term of the advance in current account. When you take out an advance in current account for your company, it will be covered too.
 

The insurance includes death cover for up to three persons who are no older than 60 when the credit facility starts.

The insurance covers assets up to 100 000 euros.

KBC Remission of Debt Insurance aligns with repayment of your credit facility, so that you’re never over- or under-insured.
 

As with any insurance, exclusions apply. These include:

• Death through suicide by the insured during the first year after signing up to the policy.
• Death of the insured within one year of the policy being signed due to a serious condition (listed in the general conditions) for which they were being treated when they signed up to the policy.