Credit Sweep

  

Credit sweeps help limit the amount of debt a corporation is actually taking on.

The bank makes a deal with the corporation (that deal is called a credit sweep) that says they'll take the extra money in their account and use it to pay down their loan(s). They can also take the extra money and put it into some sort of investment, so that, rather than just sitting there, it’s making money through whatever return the investment has.

Think of it this way: your check comes in on Friday. You put aside whatever amount you need for bills, and the bank takes the remaining probably 10 bucks and invests it in something, or uses it to pay a little more on your car loan or student loans, so you can’t blow it on stupid things.

You may be thinking, “So you’re saying they would take whatever I have leftover after paying my bills and pay more bills?” Yeah, pretty much the idea.

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