Short-term facilities are normally used for general corporate purposes. You can draw fixed interest rate advances over periods from as short as overnight to up to 12 months, with longer periods available by agreement. Interest is based on interbank rates or another standard rate and is charged at an agreed margin over the rate for the loan period. Interest is payable at the end of the period. You can also obtain short-term facilities on an "until further notice" basis. This enables you to repay advances and draw down further amounts later depending on your cash flow.
Medium-term loan are used mainly for financing investments in fixed assets (property, machinery, etc.) or acquisitions. They can also establish longer-term funding on your balance sheet to provide a sound base for your company's financing.
Flexibility and convenience
At Danske Bank we offer flexible facilities that can be structured to suit your company's particular needs. You can make drawdowns over a period of time, such as during the construction of a building when you are making instalment payments, and then consolidate them into one amount on a specified date, after which a repayment schedule takes effect. You can take out loans with or without repayment schedules, make repayments annually or semi-annually, or make full repayment at the final maturity.
In Germany, several public institutions, e.g. Kreditanstalt für Wiederaufbau (KfW), offer favourable credits, subsidies and capital funds for business investment in Germany. These support programmes are also available to foreign enterprises that make capital investments in Germany. Scandinavian enterprises often use the KfW programme for credits to small and medium-sized enterprises. Depending on the applicable programme the maturity, repayment profiles and interest rates vary. The interest rate is often below the market rate.
Likewise, German companies that invest in Scandinavia can request financing from the KfW programme. Danske Bank has many years’ experience in negotiating subsidised credits in both Germany and Scandinavia.