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Cash disbursement , or Sweeping debt , is the mandatory use of excessive free cash flow to pay off outstanding debt rather than distributing it to shareholders.
Companies always have the option to repay debt with excess cash, but they do not always choose to do it. This can cause companies to burn their cash reserves and put them in a worse situation in the future. Cash sweeping forces the company to pay at least a portion of the excess cash flow annually to repay its debt at a faster rate to minimize credit risks and liabilities.
Video Cash sweep
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Source of the article : Wikipedia
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