Burlington sets up Banking Arrangements with two Banks and gets a Sweet Discount on the Prime Rate which is currently 7.25% (Ouch)

By Pepper Parr

December 4th, 2023



It is all just part of doing business.

Lines of credit are necessary, even for the City of Burlington.

The City now works with two banks: Scotiabank and the Royal Bank.

Borrowing arrangements with the Royal Bank provide the City with a $5,000,000 line of credit at the prime-lending rate minus 3/4%.

At the current time, prime stands at 7.20%. It has not been necessary to access this credit line during 2023 or prior years nor is it anticipated to be needed for 2024. The by-law is prepared to meet the requirements of the banks.

The City also has borrowing arrangements with Scotiabank to provide a credit facility for administering the City’s purchase card program. In 2023 the limit of this credit facility was $2,000,000.

In 2024 the City will be launching an Automated Commercial Card Program in partnership with Scotiabank. The new solution allows for the secure delivery of automated Visa card payments to suppliers. Benefits to the City include reduction of costs from a streamlined payment process, improved supplier management, and an increase in the purchase card rebate received from Scotiabank.

Suppliers will also benefit from accelerated payment and improved cash flow. Scotiabank requires an increased credit facility of up to $5,000,000 to administer this program in addition to our existing purchase card program. It is anticipated that this expanded credit facility will be paid off monthly in 2024 as had been done in 2023 and prior years. This borrowing agreement does not require a security agreement



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