Although a Swingline loan, in its capacity, is similar to other lines of credit or on-demand loans, the funds granted by this type of loan should only be used to repay outstanding debts and not for other purposes such as asset acquisition or product research. In addition, this is different from a traditional line of credit that can be used for any purpose, including the purchase of goods or services and the repayment of debt. Swingline loans can be obtained by both companies and individual borrowers. For individuals, a Swingline loan can be closely compared to a payday loan, in which cash is transferred quickly but often at higher interest rates than for other forms of credit. For firms, they are most used to cover temporary deficits when incoming funds have been unexpectedly delayed (Dennis, S., Nandy, D., &Sharpe, L. G., 2000). The borrower agrees with the foregoing and, to the extent that it can effectively do so under applicable law, that any lender that acquires an interest in accordance with previous agreements may exercise against the borrower rights of set-off and counter-claim on that participation, as if that lender were a direct creditor of the borrower to the extent of such participation. IMPORTANT INFORMATION ABOUT HOW TO OPEN A NEW ACCOUNT. In order to assist the U.S. government in combating the financing of terrorism and money laundering, federal law requires all financial institutions to receive, verify, and record information identifying any person who opens an account, including the deposit account, cash management account, loans, other credit renewals, or other financial services products.
As a result, when the borrower opens an account, the administrative agent and the lender request the borrower`s name153, tax identification number, business address, and other information that allows the administrative agent and lenders to identify the borrower. The administrative agent and lenders may also request access to the borrower`s legal organization or other identification documents.153 . .