Overnight loan
 

 

A loan made by a bank to bill broker enabling him to take up bills of exchange, the loan being repayable on the following day. It is usually renewed; if not, the broker must turn to the Bank of England and would then be forced to pay minimum lending rate. As this is higher than that charged by the clearing banks, general discount rates may be affected by the broker’s assessment of this possibility.

Reference: The Penguin Business Dictionary, 3rd edt.