Draws

The Foundation of Revolving Credit

Canopy’s revolving system is built upon a unique draw management framework that sets it apart from traditional installment loans. When a borrower accesses their credit line, they create a draw – a distinct borrowing event that carries its own configurations and terms. This approach provides remarkable flexibility in how credit can be extended and managed.

Each draw functions as a discrete financial event within the credit line, allowing for individualized treatment of different borrowing instances. For example, a borrower might have multiple draws with different interest rates, fee structures, or repayment terms, all managed within the same credit line. This granular control enables lenders to offer sophisticated products that can adapt to changing market conditions or borrower needs.

The system supports both replenishable and fixed draws, giving lenders the flexibility to design products that match their business model. Replenishable draws allow the available credit limit to be restored as payments are made, enabling ongoing access to credit. Fixed draws, on the other hand, can be structured more like traditional loans while still benefiting from the flexible management capabilities of the revolving system.

This draw-centric architecture stands in stark contrast to installment loans, where a single disbursement establishes fixed terms that remain static throughout the life of the loan. Our approach enables dynamic credit management that can evolve with your borrowers' needs while maintaining strict control over credit risk and compliance requirements.