Credit Sweep

It is a kind of arrangement made for credit repair between the bank and the business where the bank automatically uses excess funds in the deposit account to reduce the outstanding line of credit.

The method has many benefits as it improves cash flow and provides the convenience of automatic transfer and it also reduces interest expense.

The amount swept depends on the threshold level as the business wants to maintain the baseline used to pay the debt.

The bank offering the service may use two-way swept where through reverse service the cash is shifted from one line of credit to a deposit to ensure the balance credit indices remain at the threshold. 

The company opts to use the service if they require certainty that funds will be available to cover the credit debit and if they want to lower the interest costs.