Revolving credit

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Line of Credit

An agreement between a bank and a company or an individual to provide a certain amount in loans on demand from the borrower. The borrower is under no obligation to actually take out a loan at any particular time, but may take part of the funds at any time over a period of several years. This agreement is fairly common in situations in which a business must make payroll but does not always have the operating income to do so, especially when its operating income is seasonal or otherwise varies from month to month. It is also called open-end credit or a revolving line of credit. See also: Credit Card.

Revolving credit.

A revolving credit arrangement allows you to borrow up to your credit limit without having to reapply each time you need cash. As you repay the money you have borrowed, it is available to be borrowed again.

For example, if you have a credit card with a credit limit of $1,500 and you make a purchase of $400, the amount of credit you have available is $1,100. But when you repay the $400, your credit limit goes back to $1,500 -- assuming you haven't charged anything else on the card.

At any given time, your balance due may fluctuate from zero to the maximum credit limit. If you don't use the credit line in any billing cycle, no fees apply in most cases. But if you have a balance due and don't repay the full amount, finance charges are added to your next bill.

Some revolving credit arrangements, such as a home equity line of credit, may have a predetermined end date, but the majority are open-ended as long as you make at least the minimum required payment on time.

References in periodicals archive ?
Its debt also includes the $200 million revolving credit facility.
23, 2006, the company replaced its existing $800 million unsecured revolving credit facility with an amended $800 million secured revolving credit facility.
0 million revolving credit facility and has terminated its prior $125.
Additionally, the new mortgage debt and revolving credit facility are available for the next five years, providing us with the financial platform to execute on our strategy and achieve our growth plan.
Also, this particular circumstance would intensify if the lenders of the unsecured revolving credit facility were to subsequently accelerate the pay-down of amounts outstanding.
5 million loan syndication, consisting of an amended floor plan credit facility and a revolving credit facility.
The amended floor plan facility and new revolving credit facility provide FreedomRoads with the flexibility and capacity to continue to execute our operating strategy," said Roger Nuttall, Executive Vice President and Chief Financial Officer of FreedomRoads.
The credit facility provided in May replaced the Company's previous $250 million revolving credit facility and a $100 million bank term loan.
In connection with this tender offer and consent solicitation, the Company entered into a new senior secured credit facility, consisting of a five-year, $150 million revolving credit facility and a six-year, $75 million term loan with J.
As of July 10, 2006, the new revolving credit facility is undrawn except for letters of credit.
The source of funds to complete this tender offer and consent solicitation will be provided from cash on hand and from borrowings under a new revolving credit facility that the Company expects to enter into.