Also called: Redraw facility
Redraw
Redraw is the ability to withdraw extra repayments you have previously made on a loan back out of the facility. It effectively lets you park surplus cash against the balance while keeping access to it.
What is a redraw?
Redraw is the ability to withdraw extra repayments you have previously made on a loan back out of the facility. It effectively lets you park surplus cash against the balance while keeping access to it.
Example
A business ahead by $40,000 on a term loan redraws $25,000 to fund a stock purchase without a new application.
Why it matters
Redraw is common on variable facilities and rare on fixed equipment finance, so do not assume extra payments are recoverable.