M&T Bank : Loans and Letters of Credit
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Loans and Letters of Credit


Lines of Credit. A flexible solution for your short-term borrowing needs, such as alleviating cash flow shortages, financing receivables, purchasing inventory or taking advantage of seasonal opportunities. Useful for accommodating growth and improving cash flow.

Revolvers (Revolving Credit Agreements). Revolvers provide an interim source of funds when total funding requirements are unpredictable. Credit is available for either short or long-term applications. Loan amounts can then be repaid and borrowed again during the arranged period.

Term Loans. Term Loans from M&T can help finance your intermediate or long-term fixed assets. For extended borrowing requirements, we may make loans that match the economic life of the financed assets.

Government Financing Programs. Our knowledge and experience can help you obtain the government-backed financial support you seek. We work closely with local and state agencies that provide credit enhancements, such as loan guarantees, low-interest loan programs, tax abatements and grants. Two government financing programs available in New York State are:

  • The New York Energy $mart Loan Program (NYSERDA) provides interest rate reductions of up to 400 basis points (4%) below the Bank's Base Interest Rate at closing. The reduced interest rate is effective for the lesser of 10 years or the term of the loan. You can save on both interest expense and energy costs - enough in some cases that the facility improvements being financed can pay for themselves in a few years.
  • The New York State Linked Deposit Loan Program provides eligible manufacturing and service sector businesses with interest rate reductions (currently 2-3 percentage points) for up to four years on commercial loans and commercial mortgages that contribute to improving productivity, performance and competitiveness.

Letters of Credit

Standby Letters of Credit. Flexible, internationally recognized financing instruments that can be used to support a range of situations including performance under a contract, payment to a supplier, workers' compensation and industrial revenue bonds. Letters of Credit support creditworthiness in both domestic and international transaction. They also eliminate the need for cash deposits or more complicated guarantees like bid or performance bonds. This saves you from tying up your funds.

Direct Pay Letters of Credit. Hybrid financial vehicles that are typically associated with taxable or tax-exempt bond financed projects. These letters of credit allow M&T’s client (the applicant) to utilize the credit rating of M&T (the issuing bank) as well as actually make payments to the trustee responsible to bondholders. In structures that utilize direct pay letters of credit, the letter of credit may be drawn upon by the fiduciary – such as a bond trustee – without first relying on funds provided by our client. There are three major types of tax-exempt bonds that Direct Pay Letters of Credit back. The bonds differ by variable or fixed rate and their maturity:

  • Seven-Day Low Floaters
  • One-Year Floaters
  • One-Year Term.

Cost-effective credit enhancement is the most important requirement for a Letter of Credit bid to be accepted by a Letter of Credit prospect. Potential investors or parties to a business transaction react positively not only to the issue of a Letter of Credit, but also to the credit rating of the bank providing this credit enhancement.

To find out more, please send us an e-mail, call the M&T Commercial Service Team at 1-800-724-2240, or contact your M&T Relationship Manager.

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