GreenPower Motor is closing a new credit facility for $2 million with Bank of Montreal. The facility is a revolving operating demand loan which bears interest at the U.S. bank rate plus 1.5% and is secured by the assets of GreenPower.

The revolving operating loan will primarily be used to finance production costs for GreenPower’s all-electric buses as well as ongoing working capital requirements.

“We are excited to be working with BMO Bank of Montreal as GreenPower enters a new phase of production and expansion,” said Fraser Atkinson, chairman of GreenPower. “This new facility will significantly reduce pressure on our ongoing working capital requirements and will allow us to focus on growth with cost-effective and flexible financial terms.”

Two directors of the company, David Richardson and Fraser Atkinson, have agreed to provide joint and several personal guarantees each in the amount of C$2.525 million ($1.950 million) in support of the revolving operating demand loan. In consideration for providing the personal guarantees, GreenPower has agreed to issue an aggregate of 4,400,000 non-transferrable common share purchase warrants to David Richardson and Fraser Atkinson. Each warrant will be exercisable into one common share of the company for a period of three years at an exercise price of CDN $0.65 ($0.5025) per share. The issuance of the warrants is subject to approval of the TSX Venture Exchange.

GreenPower designs, builds and distributes a full suite of high-floor and low-floor vehicles, including transit buses, school buses and shuttles.