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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 2608
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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What is the value of a $500,000 unsecured line of credit

Customer Question

What is the value of a $500,000 unsecured line of credit that has net 30 repayment terms and costs a company 0% yet pays back a financial return of 1% for using the entire $500,000 limit/month. I'm trying to calculate what the cost of funds would be for a business for this situation on a monthly and annual basis.
The $500,000 credit line needs to be paid back within 30 days but automatically refreshes and becomes available to the client immediately upon payment so this $500,000 loan can be used over and over every month.
Also the 1% financial return is tax free Membership Rewards that could yield between 2%-5% depending on how they are used so a calculation for the return would also save them the corporate tax bracket (39% taxable?) savings as well.
Submitted: 1 year ago.
Category: Finance
Expert:  Lev replied 1 year ago.

<<posted by mistake>>

Customer: replied 1 year ago.
Hi I didn't see a response? It says posted by mistake
Customer: replied 1 year ago.
Lev you didn't answer my question. It says posted by mistake