Short-term loans
Short-term line of credit loans
Financement-Québec offers a line of credit loan service at the subsidized rate so that organizations do not have to support costs exceeding this threshold. The ministère de l’Éducation subsidizes the interest on these borrowings according to the rate of one-month Canadian bankers’ acceptances plus a margin of 0.30%.
While awaiting long-term financing or refinancing, the capital expenditures of school boards, cégeps and universities are financed by temporary borrowings from financial institutions. The operating expenses of school boards and cégeps may also be financed by temporary borrowings.
For those school boards, cégeps and universities that cannot obtain from financial institutions temporary financing bearing interest at a rate that is below or equivalent to the subsidized rate, Financement-Québec may offer line of credit loans at the subsidized rate.
Policy and conditions of line of credit loans
Interest rate
Daily rate of one-month Canadian bankers’ acceptances on the CDOR page of REUTERS’ Monitor System at 10 a.m. (rate applicable according to
décret nº 238-2000 
(available in French only)), to which a margin of 0.30% is added.
Computation of interest
The interest rate applies to the daily balance of borrowings. On holidays, the applicable interest rate is that determined on the preceding working day.
Variation in outstanding borrowings
The borrower may increase or reduce on a daily basis the amount of its borrowings from Financement-Québec.
Interest payment date
Interest will be payable on a monthly basis, on the last working day of the month, or capitalized on the first day of the following month.
Documents required
All of the documents are prepared and supplied by Financement-Québec.
Prior to the first borrowing on line of credit
Borrowing resolution
The borrower must pass a resolution authorizing the creation of a line of credit with Financement-Québec.
Master borrowing agreement
Each participating organization must first sign a master borrowing agreement. The agreement sets out the main terms and conditions of borrowings and repayments.
Note
Each organization resorting to borrowings in the form of a line of credit must also sign a note. This note is an acknowledgment of the organization's indebtedness in favour of Financement-Québec.
Letter of instructions for payment
The borrower must provide a letter detailing the payment instructions.
When a change is made to a line of credit borrowing
Confirmation
The borrower must send Financement-Québec a confirmation each time it wishes to increase or reduce the outstanding balance on its line of credit.
Copies of the confirmation form are given to borrowing organizations by Financement-Québec.
Operation
- The borrower sends the signed transaction confirmation to Financement-Québec by fax, before 10 a.m., on the working day preceding the date of the transaction . The borrower receives by fax, that same day, an acknowledgement of receipt of the confirmation. If this acknowledgment is not received before 2 p.m., the borrower must inform the person managing line of credit loans.
- The amount of the increase or of the repayment on the line of credit borrowing, as well as the date on which the transaction will be made, must be indicated in the appropriate spaces on the confirmation form.
- The sums borrowed from Financement-Québec are deposited in the borrower’s bank account before 2 p.m. on the day of the transaction.
- The borrower must make its repayments to Financement-Québec by means of a bank transfer before 2 p.m. and according to the instructions appearing on the confirmation form.
- A statement of account detailing the transactions and the interest charges for a given month is sent by fax to each borrower within the first five working days of the following month.
