A C&I line of credit lets a business borrow, repay, and re‑borrow as needed and the lender doesn’t want the loan to be maxed out all the time. A clean‑down period is a short, required time each year when a business must pay down its revolving line of credit to a very low balance (often zero) and keep it there for a set number of days (for example, 15 consecutive days). After the clean‑down period ends, the borrower can usually borrow again up to the credit limit.
On the Loan tab scroll down towards the bottom to toggle "yes" for Clean Down Period, and then complete the fields as you deem fit. You select between "simple" or "flexible" type and for a period of 15 or 30 days.
Simple clean‑down period vs. Flexible clean‑down period
The key difference is how rigid the timing is. A simple (fixed) clean‑down period happens at a specific time every year, and for a specific number of consecutive days, regardless of business conditions:
OR
A flexible clean‑down period still requires paying the balance down to zero (or near zero) for the required number of days but the borrower may choose when it happens within an allowed window:
Differences between a simple versus flexible Clean Down are referenced in the Defined Terms and Section D of the Loan Agreement:
