Contact Us
info@smfinancialpln.co.uk
01923 751 215
Revolving credit facilities
A revolving credit facility is a line of credit that is arranged between a bank and a business. It comes with an established maximum amount, and the business can then access the funds at any time when needed. Other names used for a "a revolving credit facility" are "operating line", "bank line", or even simply "a revolver".
What is a revolving credit facility?
A revolving credit/loan facility is a form of credit issued by a financial institution that provides the borrower with the ability to draw down or withdraw, repay, and withdraw again. A revolving loan is considered a flexible financing tool due to its repayment and re-borrowing accommodations.
A revolving credit facility is not considered a term loan because, during an allotted period of time, the facility allows the borrower to repay the loan or take it out again. In contrast, a term loan provides a borrower with funds followed by a fixed payment schedule.
Revolving credit facility
A revolving loan facility provides loans to borrowers with a great deal of flexibility in terms of repayments and re-borrowing.
The interest rate on a revolving loan facility is typically that of a variable line of credit, rather than a fixed rate.