Overadvance

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Overadvance

A short-term loan that a company takes out in order to buy more material for its inventory immediately before a period of increased sales. A company uses an overadvance to finance its expected increase in sales.

References in periodicals archive ?

Indeed, in the middle of August, Salton received an amendment to its senior credit facility that provided it with additional borrowing capacity, extended the date for the termination of the facility and extended the date on which the company has to repay its outstanding overadvances on the facility.

Salton, Applica try, try again: deal is on

Several have been known to put overadvances or risk money into a deal beyond formula.

Recessionary trends fail to dent growth; Phenomenal rise: Innovative deals drive boom in corporate financing Liz Whitfield looks at the inspirational new funding options open to growing companies

Also, factors advance funds to their clients prior to maturity of the receivables and also make seasonal overadvances. There is a commission charge for the credit guarantee and the other services and interest charges on funds advanced.

'96 a strong year for factors

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