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.
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.
The interest rate applies to the daily balance of borrowings. On holidays, the applicable interest rate is that determined on the preceding working day.
The borrower may increase or reduce on a daily basis the amount of its borrowings from Financement-Québec.
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.
All of the documents are prepared and supplied by Financement-Québec.
The borrower must pass a resolution authorizing the creation of a line of credit with Financement-Québec.
Each participating organization must first sign a master borrowing agreement. The agreement sets out the main terms and conditions of borrowings and repayments.
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.
The borrower must provide a letter detailing the payment instructions.
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.