Cash Sweep

Private Credit Glossary

Mandatory prepayment mechanism requiring the borrower to apply a specified percentage (typically 50%–75%) of annual Excess Cash Flow to term-loan principal: ECF = EBITDA - Cash Taxes - Capex - Debt Service - DeltaWorking Capital. The sweep percentage typically steps down with leverage (e.g., 75% above 5.0×, 50% between 4–5×, 25% below 4×, 0% below 3×).

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