Also called: Revolving credit
Revolving facility
A revolving facility is a credit limit that can be drawn, repaid and drawn again during its term, rather than being advanced once and repaid to zero. Overdrafts, lines of credit and invoice finance lines are revolving.
What is a revolving facility?
A revolving facility is a credit limit that can be drawn, repaid and drawn again during its term, rather than being advanced once and repaid to zero. Overdrafts, lines of credit and invoice finance lines are revolving.
Example
A $250,000 revolving line drawn to $180,000 in March and repaid in May is available again in full in June.
Why it matters
It matches funding to fluctuating needs, but limits are reviewed periodically and can be reduced or withdrawn.
Where you will see it
Business line of credit, Business overdraft, Invoice finance